Conference chairs, ‘tree-hugging’ and overcharging pension investors

I have a story about two LGPS conferences, two conference chairs and an industry that appears to be changing for the better. I know, sounds like a real doozy, but bear with…
My career confession is to having launched not one, or two, but three LGPS conferences; let’s just say I’ve been in search of the right model.

The first of those conferences, while working for what used to be IBC Financial (or something like that) was the snappily titled Local Government Pension Fund Investment Forum. We gathered in The Sofitel on Waterloo Place in 2003-ish to debate weighty issues such as, ‘Is 70% a bit too much equity?’ and ‘What are these clever hedge fund things?’.

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The thematic outlier on the agenda that day was a presentation on what was then known as socially responsible investment, or SRI, by Emma Howard-Boyd, then of Jupiter, now of the Environment Agency. She took to the stage with the left field notion that putting money to good use might not be bad business and, well, don’t we have some responsibilities too as a sector?

The chair of the day, to whom we shall give the benefit of the doubt, provocatively enquired as to whether this was all just a bit of “tree-hugging”? To paraphrase, Ms Howard-Boyd’s response was something like this: ‘No, it isn’t’.

Fast-forward 17 years to another conference launch and the greatly improved title of the LGPS Asset Allocation Forum, and you’ll be unsurprised to hear that nobody was talking about tree-hugging, even as devil’s advocate. In fact our excellent chair, Aoifinn Devitt, had this to say in a pre-conference roundtable about investors addressing climate change:

“I think one of the narratives that is taking hold right now is that ‘engagement’ is better than ‘divestment’, and I think that sometimes we need to question that.

“Look at…the New York State Comptroller, and what’s happening there. There has recently been an eighteen-month study by a group of experts asking whether they should divest from all fossil fuels as a part of this climate emergency, and they resoundingly agreed that, yes, they should.”

We’ve come a long way in 17 years, and not just on climate change. The issue of hedge funds raised its head again when CCLA’s chief investment officer, James Bevan, had an answer to what they are, or rather what they’re not:
“Hedge funds are not an asset class…they are simply an egregious mechanism for overcharging the customer.” A sentiment that was warmly received by the audience.

Notwithstanding some pretty reasonable concerns about greenwashing, virtue-signalling and a proliferation of awards ceremonies built on questionable business models, there are some really “good” things going on in the investment sector at the moment and some genuinely interesting and impactful ideas are having their day.

As publishers and events organisers, we’re all queuing up to get behind these ideas and I hope that our industry makes the changes it needs to, to reflect those we’re covering on our pages and in our events.

In the meantime, here’s to those front-runners, gently teased for hugging trees, who were making all the right noises twenty odd years ago, and who continued to bang the drum for change. And to those who have taken up the mantle and are pressing for more of the same.

Peter Findlay, founder and publisher, Room151

All enquiries to events@room151.co.uk

Image by Mojca JJ from Pixabay