Partners Capital shines the spotlight on Geopolitics, China, Biotechnology and Impact Investing at its fourth Annual Investor WorkshopPartners Capital Investment Group, the Outsourced Investment Office serving sophisticated institutions and senior investment professionals in Europe, North America and Asia, held its Annual Investor Workshop on Tuesday 15th October 2019 in New York.
In attendance at the Park Hyatt Hotel in Midtown Manhattan, were approximately 140 guests, predominately from the US, but also from across Europe, the Middle East, Asia as well as Australia. Partners Capital’s client base of investment professionals, institutional clients and family offices were all represented. This included investment committee members from New York University School of Law, the Los Angeles Museum of Contemporary Art, Singapore educational endowments and INSEAD Business School.
The afternoon started with Stan Miranda, Chief Executive Officer of Partners Capital, describing the overarching theme of the Client Workshop being de-globalization, with four underlying sub-themes – geopolitics, China, biotechnology and impact investing. “While Globalization has been a strong force in the past, lifting people out of poverty and bringing the world closer together, there are serious headwinds. Given these headwinds, we face a question of whether investors should concentrate their investments more domestically or seek opportunities out of new economic alliances that are likely to form?” The afternoon provided arguments on multiple sides.
Internal speakers were joined by three experts:
Matthew Gertken, Geopolitical Strategist at BCA Research spoke on geopolitics’ impact on investment strategy going forward. BCA research concludes that the US will be in at least a decade-long economic “cold war” with China. Any trade deals between now and Trump’s re-election will be temporary stop-gaps distracting investors from the real changes in the form of deeper alliances between China and its historical and new allies; and between the US and its historical allies.
Jason Tan, Chief Investment Officer from Jeneration Capital laid out the facts surrounding the technology arms race between China and the US, highlighting the very different strategies Chinese tech leaders are following versus US tech leaders. These companies initially start with one online business and subsequently expand into additional segments (e.g., content & media, social & messaging, mobile payments), funding start-ups to create new innovations so they do not have to themselves. The integrated ecosystem approach is highlighted by the fact that China is home to a disproportionate number of the “super” unicorns ($15B+ valued companies).
Behzad Aghazadeh, Managing Partner at Avoro Capital spoke on the future biotechnology breakthroughs saying that “today we are benefitting from the groundwork of decades of research that can now be widely applied to medicine….breakthroughs in cancer are accelerating as we continue to see advances in treatments for previously uncurable indications. Today there are 16,000 ongoing pipeline projects, up from 6,000 in 2001, which provides a strong platform of ongoing innovation in the sector”. Stan Miranda added his own comments on investing in the public biotech sector – “There are 1,200 public biotech companies today, only 5% of which have revenue and 75% have not yet reached phase III drug trials. By investing with firms like Avoro, we expect to see venture capital like returns from this liquid public sector of the public equity markets”.
Partners Capital presentations included two four-person panel sessions featuring the Partners Capital CIO’s and Asset Class Heads, addressing Client Portfolio Strategy Choices and Asset Class Strategies going forward, respectively.
Client Portfolio Strategy Choices
- Will Fox, Partner, Head of North America, Boston – spoke on the right illiquidity budget
- John Collis, Partner, Head of Europe, London – spoke on tactical asset allocation
- Elizabeth Trotta, Managing Director, New York – covered our recession playbook
- David Shushan, Partner, Boston – discussed technology sector over-weights
Asset Class Strategies
- Alex Band, Managing Director, Head of Public Equities, Boston
- Rich Scarinci, Partner, Absolute Return & Credit, Boston
- Suzanne Streeter, Partner, Head of Private Markets, Boston
- Emma Bewley, Principal, Private Debt, London
The audience responded most to Elizabeth Trotta’s run-through of the “Partners Capital Recession Playbook”, which is already in place in most client portfolios. But the key message of the internal presentations was how Partners Capital believes that a highly diversified, risk-managed multi-asset class portfolio is the best long term defense against an economic downturn.
The afternoon’s final session, Impact Investing, featured a short video of Sir Ronald Cohen, filmed specifically for the event, addressing the importance of social impact investing and why investors should be focusing not only on risk and return but also on optimizing the impact of their investments on society and the environment. Euan Finlay, Partner and Chair of Partners Capital’s Responsible Investing Committee, then went on to discuss the firm’s responsible investing framework for implementing and reporting on responsible investing in client portfolios.
Paul Dimitruk, Chairman of Partners Capital, closed the day focusing on the firm’s desire to be not just an advisor, but a “thought-partner” on each client’s investment journey. He implored each client to continue to challenge and push Partners Capital to be the best it can be. “Our mission is to do go beyond just asset allocation and manager selection, but to help discern where risk and return are, and where value is created or destroyed”.