Pension Superpowers and Financial Markets in the Sino-American Century
Private Debt Investor, 2020
2 Pages Posted: 16 Mar 2020
Date Written: February 18, 2020
In this primer published in the Feb. 2020 issue of Private Debt Investor (PDI), Nicolas J. Firzli, World Pensions Council, looks at how institutional asset owners will come to the fore in the new geo-economic context defined by renewed Sino-American "coopetition" across ASEAN countries, Australia, Eastern Europe and the MENA area, Brexit and the resurgence of one-nation conservatism in Britain, the slow, relative decline of the European Union and the secular rise of "Pension Superpowers".
The paper also looks at the pivotal part played by pension (US, Canada, AUS, UK and Holland) and SWF (Abu Dhabi, Singapore, China) asset owners in the rapid transformation of investment processes and corporate governance norms in both OECD (notable Germany) and Emerging Markets & Developing Economies (EMDEs): the centrality of "sustainable finance" and the SDG-driven firm of the future is also assessed in that context.
Anglo-Saxon and Dutch pension funds are the driving force behind the secular quest for yield and "fintech", which are fast transforming the world economy. From that perspective, they are more than 30 years ahead of their French, German and Belgian counterparts. As the Rt. Hon. Nick Sherry, founder of the Australian Ministry for Superannuation, and the author have both argued, the secular trend towards private equity and private debt ("Non Listed Assets") started essentially because of the ‘venture capital operating company exception’ (VCOCE) to the US Employee Retirement Income Security Act (ERISA) and the exceptional investment leeway attached to the notion of trusteeship in Australian law.
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