FIN News: NEPC Expands Outside U.S. With London Office
The opening of NEPC’s new London office was featured by FIN News. Excerpts from the article are shown below. View the article in it’s entirety on FIN News’ site here.
“Investment consulting firm NEPC today announced the official opening of its London office.
The new office underscores NEPC’s “commitment to providing global strategies and solutions to portfolios” and regional efforts will be led by Larissa Davy, senior investment director of real assets. She will be joined in the new office by Senior Investment Director Andrew Petterson, a firm spokesperson said.”
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“London marks the first international office for NEPC, which is headquartered in Boston and maintains offices in Atlanta, Charlotte, N.C., Chicago, Las Vegas, Portland, Ore. and San Francisco.”
NEPC Expands Global Footprint with London, UK Office Opening in February
BOSTON–February 27, 2024—NEPC, LLC, one of the industry’s largest independent, investment research-driven consulting firms, today announced the official opening of its London office, underscoring the firm’s commitment to providing global strategies and solutions to portfolios. Larissa Davy, Senior Investment Director of Real Assets, will lead NEPC’s regional efforts.
“NEPC’s expansion into London reflects our unwavering commitment to delivering innovative solutions and exceptional service to our clients,” said Larissa Davy, Senior Investment Director of Real Assets. “By establishing a physical presence in Europe, we aim to deepen our understanding of global markets and provide tailored strategies that align with our clients’ long-term objectives.”
In alignment with NEPC’s mission to foster global connectivity and empower its teams, Tim McCusker, Chief Investment Officer, emphasizes the importance of this expansion. “Our presence in London enables us to engage directly with investment managers and gain valuable insights into diverse investment perspectives,” McCusker stated. “This initiative highlights NEPC’s dedication to excellence and reinforces our position as a trusted partner in the investment community.”
2023 was a year of strong growth for NEPC and its client portfolios. Looking ahead into 2024 and beyond, NEPC’s mission remains focused on fostering deep connections with the global investment manager and allocator communities, ultimately positioning teams across the firm to be better investors with access to better solutions for clients.
About NEPC, LLC
NEPC is an independent investment consultant, private wealth advisor, and OCIO provider serving over 400 retainer clients and $1.6 trillion in total assets. Combining a proprietary research team dedicated to the long-term challenges facing investors with our unique client-centric model, NEPC builds forward-looking investment portfolios for institutional investors and ultra-high-net-worth families. To learn more about NEPC, visit nepc.com.
Media Contact:
Laura Nascimento
NEPC@fullyvested.com
Pensions & Investments: Alternatives ETFs Still Waiting for Their Big Moment with Institutions
NEPC’s Dulari Pancholi was quoted in a recent Pensions & Investments article which discusses that despite heavy allocations to other forms of alts, institutional investors and private wealth clients are not yet looking to bring alternative ETFs into their portfolios. View the article on Pensions & Investments’ site here.
Over the last few years, the allocation that large institutional investors have been willing to commit to alternatives has appeared limitless. And the larger the investor, the more likely they were to utilize alts.
With few exceptions, however, alternatives offerings in the $8.3 trillion U.S. exchange-traded product market have failed to attract significant institutional interest. Yet some recent market and product trends have helped to shine a light on the opportunities and advantages of ETFs beyond equity and fixed-income exposures.
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“Similarly, Dulari Pancholi, partner and head of credit and multiasset research at NEPC, said she has observed investment managers watching ETFs and tracking flows “to get a sense of market movement and sentiment as a measurement to better inform when they might put on or take off a trade.” Institutional investors and private wealth clients, however, are not yet looking to bring alternative ETFs into their portfolios, according to Pancholi.”
Click here to continue reading the full Pensions & Investments article.
Pensions & Investments: Infrastructure Portfolios Soar While Real Estate Stumbles
NEPC’s Matthew Ritter was quoted in a recent Pensions & Investments article to discuss the rise in infrastructure allocations and the expansion of targets based on investor appetite. View the article on Pensions & Investments’ site here.
Real estate equity assets among the top 200 U.S. retirement plans with defined benefit assets stayed relatively flat for the year ended Sept. 30 as write-downs affected performance, while infrastructure continues to grow by leaps and bounds, according to the latest Pensions & Investments survey.
The differences reflect not only performance but the maturity of the real estate asset class, into which U.S. retirement plans have invested for decades, while infrastructure has been one of the fastest growing asset classes from virtually nothing less than 20 years ago.
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“Matthew Ritter, partner and head of real assets investments at investment consultant NEPC, said in an interview that the rise in infrastructure assets is due primarily to so many pension funds creating new targets to the asset class over the past five years and building to those targets.
“Many are still underallocated,” said Ritter, so he expects those assets to continue to rise dramatically. Perhaps the most notable trend among this groundswell of investments is how the markets has evolved and expanded.
“It depends on each investor’s objectives,” said Ritter. “You can achieve return, income stream, partial inflation hedge, and overall a good diversifier for the portfolio.”
“If you look back historically, the traditional definition of infrastructure, you think of infrastructure as long-duration assets with stable cash flows, frequently in a kind of monopolistic environment.”
While that would apply to the traditional areas of investment, such as roads and electric transmission lines, Ritter said he’s seen a big growth in the areas of digital infrastructure, energy transition and renewable energy.
“We’ve increasingly seen managers view infrastructure more as private equity in nature in terms of their risk/return profile,” said Ritter. “That dynamic has expanded the appeal of infrastructure.”
Click here to continue reading the full Pensions & Investments article.
Reuters: Stocks Surge, Bond Yields Slip Ahead of Fed Decision
NEPC’s Phillip Nelson was quoted in a recent Reuters article to discuss the firm’s stance on the market’s take on interest rates. View the article on Reuters’ site here.
NEW YORK/LONDON, Jan 29 (Reuters) – Global stocks surged on Monday, with the S&P 500 closing at a new record close and European shares hitting a two-year high, as markets slashed ambitious bets at the end of 2023 on interest rate cuts by the Federal Reserve and other central banks.
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The Wall Street Journal: There’s a New Option in Your 401(k). Read This Before You Try It.
Bill Ryan, Head of Defined Contribution Solutions at NEPC, sat down with The Wall Street Journal to discuss why bespoke retirement plans, such as managed accounts, are not always worth the additional cost. View the article on The Wall Street Journal’s site here.
What’s the best option for your 401(k), one-size-fits-all or a custom fit?
Most of us go with the one-size-fits-all option, putting our retirement savings in target-date funds built to maximize returns based on our timelines for retirement. A growing number of people, however, are choosing the custom fit in the form of managed accounts, which seek to tailor investment portfolios and advice to their situations.
As with clothing, the custom option will cost you. What investors have to determine is whether a managed account merits the price.
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Only about 15% of people in managed accounts typically provide the information needed to personalize their portfolios, said Bill Ryan, head of defined contribution solutions at NEPC. Without data on factors including risk tolerance and outside account balances, people mightmiss out on the potential for extra value that they are paying for, he added.
A small fraction of employers auto-enroll workers in managed accounts, but most plans that offer them leave it up to savers to choose to sign up. Most 401(k) plans offer only one managed account service, making it impossible for employees to comparison shop.
Click here to continue reading the full Wall Street Journal article.
Chief Investment Officer: Public Equities Drove University Endowment Returns in 2023
NEPC’s mega-endowments white paper data was recently featured in an article to discuss what caused many smaller universities to outperform larger university endowments in 2023. View the full article on Chief Investment Officer’s site here.
What allowed the U.C. San Diego Foundation to outperform all of its university endowment peers last year? Its equity-heavy portfolio.
The $1.4 billion university endowment for the University of California, San Diego returned 11.3% in fiscal year 2023, which ended June 30, 2023, the highest reported return of any endowment with more than $1 billion in assets for the period, according to data tracked by NEPC LLC.
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Of the 62 endowments with assets of more than $1 billion tracked by NEPC, six had negative returns in fiscal year 2023. The University of North Carolina, Duke University, Princeton University, Vanderbilt University, Washington University St. Louis and MIT endowments returned losses of 0.4%, 1.0%, 1.7%, 2.0%, 2.3%, and 2.9%, respectively.
What united these funds was their very high allocations to alternative investments, which generally underperformed other asset classes in the fiscal year, most notably private equity.
Click here to read the full interview on Chief Investment Officer’s site.
Chief Investment Officer: Investors’ Interest Rate Expectations Unrealistic, per NEPC
NEPC’s Phillip Nelson and Tim McCusker were recently quoted in an article to discuss how after many years of low borrowing costs, too many people have the delusion that these will return. View the full article on Chief Investment Officer’s site here.
To many investors, it is back to normal for interest rates, meaning they expect the sunny days of low single digits will return soon. Consulting firm NEPC begs to differ.
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The Fed, which had jacked up interest rates to combat the inflationary surge, thinks the mission is accomplished and is talking about lowering its benchmark federal funds rate from its current band of 5.25% to 5.50%. Many investors are applauding, expecting lower rates to further juice the stock market.
That buoyant scenario is simply not likely, according to an NEPC webinar on Thursday. A lot of people “are anchored to low inflation,” said Phillip Nelson, the consulting firm’s head of asset allocation. As a result, “the market is biased toward low rates.”
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Meanwhile, in a related delusion, NEPC’s strategists contended that investors remain besotted by the stock market’s bullish performance and believe more is on the way.
Trouble is, noted Tim McCusker, NEPC’s CIO, the S&P 500’s recent rise has merely recovered ground lost in the 2022 slump. The index’s new peak level set on Thursday, of 4,894.16, was just slightly more than the January 3, 2022, apex of 4,796.56. Thus, he said, “This has been a round trip.”
FundFire: Corporate Pensions Try to Protect Funded Status amid Market Uncertainty
NEPC’s Jake Mallinson was quoted in a recent FundFire article to discuss where most defined benefit plan investors plan to allocate their assets, according to our latest Defined Benefit Trends Survey. View the article on FundFire’s site here.
Corporate pensions are prioritizing funded status protection rather than return maximization amid fears of a market downturn, according to a report published by NEPC in November.
The consulting firm interviewed 51 companies and healthcare organizations with defined benefit plans ranging from $100 million to more than $300 billion in size about their market sentiment and liability-driven investments, or LDI.
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“The increase in fixed income returns, especially for defined benefit plans that have large allocations to fixed income, saw that big jump in expected return on assets,” said Jake Mallinson, a consultant at NEPC.
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Long duration corporate or Treasury bonds are the most popular LDI instruments, according to the report.
“That shift in investing is really looking to de-risk the portfolio over time and lock in those funded status gains,” Mallinson said.
Read the full article on FundFire’s website here.
Celebrating Growth: NEPC Announces New 2024 Partners and Principals
BOSTON–December 6, 2023—NEPC, LLC one of the industry’s largest independent, research-driven investment consulting firms, today announced the election of six new partners and the promotion of five new principals across the firm. These new elections and promotions will be effective January 1, 2024.
2023 has seen strong growth for NEPC and its client portfolios. These new promotions highlight NEPC’s commitment to cultivating an experienced team across the firm that clients can trust will help them achieve their long-term goals.
“NEPC takes immense pride in nurturing and empowering our exceptional talent,” said Michael Manning, Managing Partner of NEPC. “It’s an honor to watch our team grow within the firm and also to bring in fresh perspectives.
The newly elected Partners are:
- Rick Ciccione, Senior Consultant
- Rose Dean, CFA, Senior Consultant
- Oliver Fadly, Head of Private Debt Investments
- Joe Nankof, ASA, Senior Consultant
- Deirdre Robert, CFA, CAIA, Senior Consultant
- Daniel Runnals, CFA, CAIA, Senior Consultant
NEPC’s new Principals are:
- David Barnes, CFA, CAIA, Senior Consultant
- Peggy Boraks, Senior Controller
- Aaron Chastain, CFA, Senior Consultant
- Nick Mann, Senior Investment Director, Private Markets
- Emma O’Brien, Senior Consultant
Manning also stated, “These well-deserved appointments are a testament to our culture and core beliefs of elevating the experience and value we bring to the table to provide our clients with best-in-class solutions.”
For more information on NEPC’s employee workforce and to explore open opportunities, click here.
About NEPC, LLC
NEPC is an independent investment consultant, private wealth advisor, and OCIO provider serving over 400 retainer clients and $1.6 trillion in total assets. Combining a proprietary research team dedicated to the long-term challenges facing investors with our unique client-centric model, NEPC builds forward-looking investment portfolios for institutional investors and ultra-high-net-worth individuals. To learn more about NEPC, visit nepc.com.
Media Contact:
Laura Nascimento
