Episode 47: Pinebridge’s Michael Kelly

Where to go Active and Where Passive

Multi-manager firm Pinebridge Investments is a partner of Australian pension fund SunSuper and was given the task to write a research paper on how it decided to go active or passive in a particular market. Michael Kelly is Global Head of Multi-Asset at Pinebridge and takes us through the research paper. He also talks about his entry into the investment industry, including playing softball with Alan Greenspan.

* Please note that this podcast was recorded before the coronavirus became a pandemic.

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Overview of Michael Kelly podcast

1:30 Alan Greenspan’s firm
3:25 Greenspan in his early days and his love for baseball
7:00 DAA or market timing? A medium term play.
8:00 We look at markets as if they are individual securities
9:00 Can you name some investments that worked out well and some that didn’t?
12:00 You asked me very politely to share some of my bloopers
14:00 Isn’t interesting that in 2020 we still have crisis orientated monetary policy
16:00 Sunsuper’s research task into when to you passive and active
18:00 When to go active and when passive
28:00 Don’t fund managers claim they can outperform all of the time?
29:00 You can look forward and see which markets become less efficient
31:00 Increased regulations have made it too expensive for small companies to list
32:00 Do portfolios need to include a bit of private assets to compensate for companies not listing as early?
34:00 Do ESG policies make passive less passive?
36:00 Is divestment really going to change practices at the majority of companies?
38:00 How do you engage with companies?
39:00 When passive investing is no longer a passive experience.
42:00 We are in a ‘Hotel California’ type of glut: you can check in, but never leave.

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The [i3] Podcast is a conversation with some of the leading institutional investors around the world, discussing their philosophy towards investing, in particular towards portfolio construction and investment strategy. The [i3] podcast is available on iTunes, Google Podcast, Spotify, Stitcher or your favourite podcast platform.