Institutional equity investing in Britain from 1900 to 2000

In Britain around 1900, established financial institutions for long-term savings such as life assurers, and pension funds which were just in their formative phase, did not make material allocations to publicly quoted equity markets or ordinary shares; long-established life assurers, for example, had less than 3 per cent allocated to the asset class (Baker and Collins 2003). Over the following 100 years, this picture radically changed, with equities emerging as the central asset class for many institutional investors and the term ‘the cult of (the) equity’ was coined (Scott 2002; Avrahampour 2015). As the century progressed, institutional investors superseded private individuals and became the dominant holders of British publicly quoted companies (Cheffins 2010). Despite the attractions of the asset class and their generally high returns, within a relatively short period by the end of the century, institutional equity exposure had peaked and was in decline both at life assurers and within pension funds. Here we highlight, and link together, the key actuarial (Turnbull 2017) and investing (Morecroft 2017) ideas that were influential in these developments. We also identify the main individuals who were instrumental in the application of equity investing to institutional portfolios. The article has an emphasis towards years from 1920 to 1960 when most of the changes to investment practice and actuarial theory occurred.

Download Full-text

Many Happy Returns? Investment Governance and the Political Economy of Time in UK Pensions Provision

Pensions Imperilled ◽

10.1093/oso/9780198782834.003.0007 ◽

2021 ◽

pp. 209-246

Author(s):

Craig Berry

Keyword(s):

Political Economy ◽

Financial Institutions ◽

Capital Investment ◽

Pension Funds ◽

The Political ◽

Private Pensions ◽

Pension Schemes ◽

The Future ◽

The Uk

We are increasingly conscious that private pension schemes in the UK are primarily financial institutions. UK private pensions provision has always been highly financialized, but the individualization of provision means this dynamic matters more than ever to retirement incomes. Furthermore, individualization has occurred at a time when the UK economy’s capacity to support a long-term approach to capital investment, upon which pensions depend, has declined. The chapter argues that pensions provision essentially involves managing the failure of the future to resemble the present, or more specifically present forecasts of the future. As our ability to manipulate the value of the future has increased, our ability to tolerate forecast failure has declined. The chapter details how pension funds invest, and how this has changed, and provides an original understanding of several recent attempts to shape pensions investment, ultimately demonstrating the limitations of pensions policy in shaping how provision functions in practice.

Download Full-text

Prudent person rules or quantitative restrictions? The regulation of long-term institutional investors' portfolios

Journal of Pension Economics and Finance ◽

10.1017/s1474747202001099 ◽

2002 ◽

Vol 1 (2) ◽

pp. 157-191 ◽

Cited By ~ 31

Author(s):

E. PHILIP DAVIS

Keyword(s):

Financial Economics ◽

Institutional Investors ◽

Emerging Market ◽

Oecd Countries ◽

Pension Funds ◽

Emerging Market Economies ◽

Life Insurers ◽

Financial Consequences ◽

Alternative Approaches

This paper examines the rationale, nature and financial consequences of two alternative approaches to portfolio regulations for life insurers and pension funds, namely prudent person rules and quantitative portfolio restrictions. The argument draws on the financial-economics of investment and the differing characteristics of institutions' liabilities, as well as evidence drawn from major OECD countries. The overall conclusion is that prudent person rules are superior to restrictions, particularly for pension funds, except in certain circumstances that may hold temporarily in emerging market economies.

Download Full-text

Issues in Benchmarking Commodity Performance

10.1093/oso/9780190656010.003.0017 ◽

2018 ◽

Author(s):

Aaron Filbeck

Keyword(s):

Institutional Investors ◽

Portfolio Diversification ◽

Exchange Traded Funds ◽

Barriers To Entry ◽

Index Funds ◽

Asset Class ◽

Asset Classes ◽

Alternative Sources ◽

The Many

Commodity investments have continued to gain traction in diversified portfolios since the 1990s. Historically low correlations relative to traditional asset classes, different fundamental drivers, and investor demand for alternative sources of return have brought commodity investments forward as a solution that provides overall portfolio diversification while maintaining similar long-term return streams. A large inflow of institutional investors and noncommercial traders has increased demand and lowered barriers to entry. Many of these investors simply want exposure to commodities as an asset class, often investing in index funds or exchange-traded funds (ETFs). In some cases, investors assume that the underlying commodity indexes that these investment vehicles track represent appropriate benchmarks asset class performance. In reality, the many different commodity indexes available make benchmarking asset class performance more difficult.

Download Full-text

Commodity Exchange-Traded Funds

10.1093/oso/9780190656010.003.0013 ◽

2018 ◽

Author(s):

Christopher Milliken

Keyword(s):

Portfolio Diversification ◽

Futures Contracts ◽

Spot Price ◽

Exchange Traded Funds ◽

Investment Strategies ◽

Regulatory Structure ◽

Commodity Exchange ◽

Asset Class ◽

Exchange Traded Fund

Commodity exchange-traded funds (ETCs), which debuted in 2004, enable investors to access an asset class previously difficult or expensive to access. Although a small segment of the overall exchange-traded fund (ETF) universe, ETCs have grown in popularity with both speculators and investors looking for long-term portfolio diversification. Examples of the types of commodities that are now accessible through ETCs include gold, oil, and agricultural. The literature on ETCs is limited, but academic and industry work has centered on using futures contracts to replicate the performance of the underlying commodities spot price as well as the effect additional capital has had on the integrity of the futures market. This chapter covers this topic by reviewing the growth, investment strategies, and regulatory structure of ETCs as well as the underlying effects these funds have had on the underlying markets with which they engage.

Download Full-text

Financial Sustainability and Infrastructure Finance

10.1093/oso/9780198827948.003.0012 ◽

2018 ◽

Author(s):

Felipe Carvalho de Rezende

Keyword(s):

Financial Institutions ◽

Financial Stability ◽

Global Financial Crisis ◽

Financial Sustainability ◽

Infrastructure Finance ◽

Strategic Role ◽

Development Banks ◽

The Global Financial Crisis ◽

Capital Development

Among the lessons that can be drawn from the global financial crisis is that private financial institutions have failed to promote the capital development of the affected economies, and to dampen financial fragility. This chapter analyses the macroeconomic role that development banks can play in this context, not only providing long-term funding necessary to promote economic development, but also fostering financial stability. The chapter discusses, in particular, the need for public financial institutions to provide support for infrastructure and sustainable development projects. It concludes that development banks play a strategic role by funding infrastructure projects in particular, and outlines the lessons for enhancing their role as catalysts for mitigating risks associated with such projects.

Download Full-text

Institutional Investors and Hedge Fund Activism

The Review of Corporate Finance Studies ◽

10.1093/rcfs/cfaa027 ◽

2020 ◽

Author(s):

Simi Kedia ◽

Laura Starks ◽

Xianjue Wang

Keyword(s):

Stock Returns ◽

Institutional Investors ◽

Operating Performance ◽

Hedge Fund ◽

Target Firms ◽

Hedge Fund Activism ◽

Institutional Shareholders

Abstract Hedge fund activists have ambiguous relationships with the institutional shareholders in their target firms. While some support their activities, others counter their actions. Due to their relatively small holdings in target firms, activists typically need the cooperation of other institutional shareholders that are willing to influence the activists’ campaign success. We find the presence of “activism-friendly” institutions as owners is associated with an increased probability of being a target, higher long-term stock returns, and higher operating performance. Overall, we provide evidence suggesting the composition of a firm’s ownership has significant effects on hedge fund activists’ decisions and outcomes.

Download Full-text

Management of a Mycotic Aneurysm in a Patient with COVID-19: A Case Report

Medicina ◽

10.3390/medicina57060620 ◽

2021 ◽

Vol 57 (6) ◽

pp. 620

Author(s):

Muzammil H. Syed ◽

Mark Wheatcroft ◽

Danny Marcuzzi ◽

Hooman Hennessey ◽

Mohammad Qadura

Keyword(s):

Abdominal Aortic Aneurysm ◽

Aortic Aneurysm ◽

Stent Graft ◽

Mycotic Aneurysm ◽

Neurological Deficits ◽

Endovascular Stent ◽

Endovascular Stents ◽

Abdominal Aortic ◽

Short Period

The aim of this paper is to share our experience in managing a patient with Klebsiella pneumoniae mycotic abdominal aortic aneurysm who was also infected with COVID-19. A 69-year-old male was transferred to our hospital for the management of an infra-renal mycotic abdominal aortic aneurysm. During his hospital course, the patient contracted severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). He was intubated due to respiratory distress. Over a short period, his mycotic aneurysm increased in size from 2.5 cm to 3.9 cm. An emergency repair of his expanding aneurysm was achieved using our previously described protocol of coating endovascular stents with rifampin. The patient was managed with a rifampin-coated endovascular stent graft without any major complications. Postoperatively, the patient did not demonstrate any neurological deficits nor any vascular compromise. He remained afebrile during his postoperative course and was extubated sometime thereafter. He was then transferred to the ward for additional monitoring prior to his discharge to a rehab hospital while being on long-term antibiotics. During his hospital stay, he was monitored with serial ultrasounds to ensure the absence of abscess formation, aortic aneurysm growth or graft endoleak. At 6 weeks after stent graft placement, he underwent a CT scan, which showed a patent stent graft, with a residual sac size of 2.5 cm without any evidence of abscess or endoleak. Over a follow-up period of 180 days, the patient remained asymptomatic while remaining on long-term antibiotics. Thus, in patients whose surgical risk is prohibitive, endovascular stent grafts can be used as a bridge to definitive surgical management.

Download Full-text

An unusually low density ultra-short period super-Earth and three mini-Neptunes around the old star TOI-561

Monthly Notices of the Royal Astronomical Society ◽

10.1093/mnras/staa3728 ◽

2020 ◽

Author(s):

G Lacedelli ◽

L Malavolta ◽

L Borsato ◽

G Piotto ◽

D Nardiello ◽

...

Keyword(s):

Transit Time ◽

Time Variation ◽

Planetary System ◽

Radial Velocities ◽

Low Density ◽

Outer Planets ◽

Short Period ◽

The Stability

Abstract Based on HARPS-N radial velocities (RVs) and TESS photometry, we present a full characterisation of the planetary system orbiting the late G dwarf After the identification of three transiting candidates by TESS, we discovered two additional external planets from RV analysis. RVs cannot confirm the outer TESS transiting candidate, which would also make the system dynamically unstable. We demonstrate that the two transits initially associated with this candidate are instead due to single transits of the two planets discovered using RVs. The four planets orbiting TOI-561 include an ultra-short period (USP) super-Earth (TOI-561 b) with period Pb = 0.45 d, mass Mb = 1.59 ± 0.36 M⊕ and radius Rb = 1.42 ± 0.07 R⊕, and three mini-Neptunes: TOI-561 c, with Pc = 10.78 d, Mc = 5.40 ± 0.98 M⊕, Rc = 2.88 ± 0.09 R⊕; TOI-561 d, with Pd = 25.6 d, Md = 11.9 ± 1.3 M⊕, Rd = 2.53 ± 0.13 R⊕; and TOI-561 e, with Pe = 77.2 d, Me = 16.0 ± 2.3 M⊕, Re = 2.67 ± 0.11 R⊕. Having a density of 3.0 ± 0.8 g cm−3, TOI-561 b is the lowest density USP planet known to date. Our N-body simulations confirm the stability of the system and predict a strong, anti-correlated, long-term transit time variation signal between planets d and e. The unusual density of the inner super-Earth and the dynamical interactions between the outer planets make TOI-561 an interesting follow-up target.

Download Full-text

Heatwaves in Kenya 1987–2016: Facts from CHIRTS High Resolution Satellite Remotely Sensed and Station Blended Temperature Dataset

Atmosphere ◽

10.3390/atmos12010037 ◽

2020 ◽

Vol 12 (1) ◽

pp. 37

Author(s):

Martial Amou ◽

Amatus Gyilbag ◽

Tsedale Demelash ◽

Yinlong Xu

Keyword(s):

High Resolution ◽

Adaptation Strategies ◽

Reference Period ◽

The West ◽

Tana River ◽

Short Period ◽

The World ◽

Northern Side ◽

Data Source

As global temperatures continue to rise unabated, episodes of heat-related catastrophes across the world have intensified. In Kenya, heatwave phenomena and their associated impacts are ignored and neglected due to several reasons, including unreliable and inconsistent weather datasets and heatwave detection metrics. Based on CHIRTS satellite infrared estimates and station blended temperature, this study investigated the spatiotemporal distribution of the heatwave events over Kenya during 1987–2016 using the Heatwave Magnitude Index daily (HWMId). The results showed that contrary to the absence of heatwave records in official national and international disaster database about Kenya, the country experienced heatwaves ranging from less severe (normal) to deadly (super-extreme) between 1987 and 2016. The most affected areas were located in the eastern parts of the country, especially in Garissa and Tana River, and in the west-northern side around the upper side of Turkana county. It was also found that the recent years’ heatwaves were more severe in magnitude, duration, and spatial extent. The highest magnitude of the heatwaves was recorded in 2015 (HWMId = 22.64) while the average over the reference period is around 6. CHIRTS and HWMId were able to reveal and capture most critical heatwave events over the study period. Therefore, they could be used respectively as data source and detection metrics, for heatwaves disaster emergency warning over short period as well as for long-term projection to provide insight for adaptation strategies.

Download Full-text