Peer collaboration in private markets
Over the past decade, pension funds, sovereign wealth funds, government reserve funds, endowments and other long term asset owners have increasingly been looking for new ways to deliver optimal returns to their fiduciaries by leveraging their competitive advantages, including: a long-term investment horizon; “deep pockets”; detailed understanding of local markets; and expertise and networks in key industry sectors.
In the search for new ways of creating value, many institutional investors have reviewed the balance of externally and internally managed assets, and assessed how to increase their direct exposure to real assets, in particular in private markets. As internal capacity and experience have been built among the leading funds, this has also led to a growing potential for “peer-to-peer” collaboration on education, strategy development, and investment opportunities.
The role of the IIR
The IIR was created in 2010 by a group of leading pension and sovereign funds who recognized the mutual benefit of collaborating with peers. The IIR was designed to be their platform for building peer relationships and identifying areas of investment collaboration. Since 2010, the IIR has grown to be an international community of senior investment executives from over 40 leading global institutional investors who gather twice annually for confidential, peer-to-peer discussions.
The IIR holds two meetings annually, in the Fall (October/November) and in the Spring (May/June). These meetings are peer-to-peer roundtables organized in a manner that optimizes direct interaction among eligible participants. Between meetings, the IIR also supports a range of collaboration initiatives prioritized by the IIR Board and participants. Recognizing that collaboration is difficult, the IIR provides additional resources to help institutional investors initiate, implement and expand innovative collaborations in private markets. A number of concrete collaborations have resulted from discussions hosted by the IIR.
Participation in the IIR is restricted to senior investment executives from eligible pension funds, sovereign funds, government reserve fund and other long term asset owners who satisfy criteria established by the Board.
The IIR is supported by a secretariat based in Quebec City (Canada) and London (UK), and has its corporate headquarters in Paris (France). The IIR Secretariat also draws on the expertise of several senior advisors from academia, industry and pension funds.
Investment returns and social benefit
The IIR’s mission is to contribute to the maximization of long-term risk-adjusted returns, consistent with the fiduciary duty and mandates of its participants. But in addition to the investment benefits that accrue to the employees, citizens and tax-payer beneficiaries of these pension funds, sovereign funds and government reserve funds, re-orienting long-term institutional investors towards “long-term” strategies creates a pool of patient capital that can be invested in a broad range of productive assets that are essential to long-term sustainable economic development, including:
- Meeting the global “Infrastructure Gap”;
- Sectoral transformation in areas such as healthcare, energy, transport, and urbanization;
- Accelerating development of emerging economies.
The IIR’s Board is composed of its sixteen founding and strategic members, who are: the Abu Dhabi Investment Authority (ADIA), ATP (Denmark), BCI (British Columbia Investment Management Corporation bcIMC, Canada), Caisse de dépôt et placement du Québec (CDPQ, Canada), CDC International Capital (subsidiary of Caisse des dépôts et consignations, France), Canada Pension Plan Investment Board (CPPIB), China Investment Corporation (CIC), Future Fund (Australia), GIC Special Investments Pte Ltd (Singapore), Hong Kong Monetary Authority (HKMA), Ontario Teachers’ Pension Plan (OTPP, Canada), PGGM (Netherlands), Queensland Investment Corporation (QIC, Australia), Russian Direct Investment Fund (RDIF), Temasek International Pte Ltd (Singapore), TIAA (U.S.A.) and Christian Racicot, as Founding CEO.
The current Chairman of the IIR is Mr. Lim Hock Tay, Deputy Group Chief Investment Officer and President Europe GIC (London) Private Limited (Singapore).