EDHEC-Risk Institute London - Nice - Paris - Singapore
EDHEC-Risk Institute: Key Figures, 2014-2015 Number of permanent staff 48 Number of research associates & affiliate professors 36 Overall budget € 6,500,000 External financing € 7,025,695 Number of conference delegates 1,087 Number of participants at research seminars 1,465 and executive education seminars 2
A Message from the Dean of EDHEC Business School 3
“ “I believe that institutional investing, such as formulating investment policies for the long term for pension funds is very much a question linked to financial economic theory and academic research and findings. At the same time, we need to find practical solutions for the day-to-day work with our portfolios and I think that EDHEC-Risk Institute is bridging those perspectives in a very good way.” Tomas Franzén, Former Chief Investment Strategist, Andra AP-fonden (AP2) , Founder, Franzen Advisory and Former Chairman, EDHEC-Risk Institute’s International Advisory Board 4
Research for Business Since 2001, EDHEC has been pursuing Among these areas, asset and staff, and counts 36 affiliate relevance of the centre’s research an ambitious policy in terms of risk management have occupied professors and research associates programmes are guaranteed by the practically relevant academic privileged positions, leading to the from the financial industry among centre’s management structure and research. This policy, known as creation in 2001 of EDHEC-Risk its ranks. The year 2015 saw the the oversight exercised by the leading “Research for Business”, aims to make Institute, which has developed an EDHEC-Risk Days conference in experts serving on its international EDHEC an academic institution of ambitious portfolio of research London. The EDHEC-Princeton advisory board. reference for the industry in a small and educational initiatives in the Institutional Money Management number of areas in which the school domain of investment solutions for conference returned to New York The following pages will provide has reached critical mass in terms of institutional and individual investors. in 2015 for its third edition. All in you with a brief introduction to expertise and research results. EDHEC-Risk plays a noted role in all, EDHEC has hosted more than the activities carried out by furthering applied financial research 6,000 City professionals at its EDHEC-Risk Institute. The centre’s and systematically highlighting its research seminars and conferences team is available to help you analyse practical uses. As part of its “Research in London since 2003. The London the ways in which you could tap into Olivier Oger, for Business” philosophy, the research and Singapore campuses are also at its expertise for the benefit of your Dean of EDHEC Business School centre maintains a dialogue with the heart of an ambitious executive organisation. professionals which benefits the education policy that sees EDHEC industry as a whole. At the same train over 10,000 senior executives time, its proprietary R&D provides and business leaders worldwide every sponsors with an edge over the year. competition and joint ventures allow selected partners to develop new To ensure that its activities meet business opportunities. the highest academic standards and truly benefit the industry, EDHEC- EDHEC-Risk Institute now boasts Risk Institute subjects its activities a team of close to 50 permanent to strict validation processes. The professors, engineers and support scientific quality and operational 5
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The Need for Investment Solutions 7
“ Amundi has continuously supported EDHEC-Risk Institute over the past years, convinced by the quality of their state-of- the-art academic contribution, including in the Smart Beta field where innovation remains very intense. The excellence of the literature produced within the “ETF and Passive Investment Strategies” research chair is of great help to investors and the industry as a whole, while enabling us to better accompany our clients in their asset allocation, with added value solutions.” Valérie Baudson, CEO, Amundi ETF, Indexing & Smart Beta 8
The Need for Investment Solutions The investment industry is currently These evolutions in accounting paradigm has been questioned with challenges. Just as in institutional experiencing profound structural and prudential regulations have heightened intensity, and a new money management, the need to changes, in the face of new challenges subsequently led a large number of paradigm is starting to emerge, with design an asset allocation solution that are faced by both institutional corporations to close their defined- substantial welfare improvements that is a function of the kinds of and individual investors. For pension benefit pension schemes so as to expected for asset owners. This particular risks to which the investor funds in particular, the shift in most reduce the impact of pension liability paradigm has been labelled liability- is exposed, or needs to be exposed accounting standards towards the risk on their balance sheet and income driven investing (LDI) for institutional to meet liabilities or to fulfil goals, as valuation of pension liabilities at statement. Overall, a massive shift investors, whose problems are broadly opposed to purely focusing on the market rates (mark-to-market), from defined-benefit to defined- summarised in terms of their liabilities, risks impacting the market as a whole, instead of fixed discount rates, has contribution pension schemes is and it has been labelled goal-based makes standard approaches (which are resulted in an increase in liability taking place across the world. As investing (GBI) for individual based on balanced portfolios invested portfolio volatility. This new constraint a result, individuals are becoming investors, whose problems can be in a mixture of asset class portfolios has been reinforced in parallel by increasingly responsible for making fully characterised in terms of their actively and passively managed stricter solvency requirements that investment decisions related to specific consumption of bequest goals against market benchmarks) mostly Lionel Martellini, PhD Director, followed the 2000-2003 pension their retirement financing needs, throughout their lifetime. inadequate. EDHEC-Risk Institute fund crisis, and ever stricter solvency investment decisions for which they requirements are also increasingly have no expertise. In this context, the A variety of common meaningful goals The emergence of this novel LDI/ being imposed on insurance investment management industry can be identified for most individuals GBI paradigm is not only a threat for companies in the US, Europe and Asia. has a great responsibility in terms of including wealth accumulation, traditional asset management firms, the need to provide individuals with financing children’s education, or but also a source of opportunity. suitable retirement solutions. generating minimum and target levels At the asset allocation level, we of replacement income in retirement, have seen that the “death of policy In the new highly challenging already mentioned as arguably portfolios” has led to the development environment, and given the intrinsic the greatest challenge for most of fiduciary management services difficulty of delivering added value individuals. Some changes with respect based on dynamic liability-driven through security selection decisions to existing investment practices are investing . At the asset class level, alone, the relevance of the old needed to help meet these formidable the disappointment over expensive 9
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