Mercer has released a starting line-up for its annual conference in October, which will deliver the house view on resilience, responsibility and risk in the late-cycle era.
The Mercer forum, a standard fixture in the NZ conference circuit, kicks off with a climate change portfolio primer from the group’s Australian-based senior responsible investment specialist, Jillian Reid.
Reid has plenty of material to draw on, including Mercer’s 2019 ‘Investing in a time of climate change – the sequel’ study that builds on its earlier 2015 report.
The 2019 follow-up paper lays out a number of potential climate change scenarios along with strategies and portfolio ‘stress tests’ that could help investors adapt.
Overall, the latest Mercer climate change report concludes: “Our assumptions suggest an asymmetric assessment of carbon-risk pricing — either it is priced in or it is mispriced, and fossil-fuel-exposed stocks will underperform over time,” the paper says. “…on balance, we think it is more likely that carbon risk is underpriced today than either fairly priced or overpriced.”
Later in the day, the conference reprises related responsible investment themes in a panel featuring two chief investment officers – Mercer Australia’s Kylie Willment and Jens Peers from sustainable investing specialist firm, Mirova (an affiliate of French firm Natixis) – and Kirsty Campbell, former Financial Markets Authority executive turned professional director.
The trio will explore whether responsible investors can exert influence without using exclusions.
Elsewhere, Mercer has devoted two consecutive sessions to exploring different aspects of factor investing, the burgeoning global trend also known as ‘smart beta’.
First-up, recent Mercer NZ recruit and head of delegated solutions, Brian Kearney, investigates the factor fuss followed by the group’s global CIO alternatives, Bill Muysken, who considers whether smart beta has killed the hedge fund.
Endowments, post-retirement trends, private assets and an overview of market risks also have stage-time along with an inevitable Australian Royal Commission session (hosted by Mercer risk and compliance leader, Crespo Gao, and DLA Piper’s Tracey Cross).
Liam Malone, gold medal-winning NZ paralympian, fills the sole non-investment spot of the day, although still in keeping with the resilience theme.
Finally, Mercer NZ CIO, Philip Houghton-Brown, rounds off the day in a traditional head-to-head debating a key investment question – but this year without long-time sparring partner, David Stuart.
Stuart, who retired as Mercer Australia chief strategist late in 2018, resurfaced last week as CIO of the almost $10 billion Hobart-based superannuation fund, Tasplan.
He has been replaced as foil to Houghton-Brown by Mercer Australia’s newly-appointed head of investment strategy, Gwion Moore. The pair will take opposing positions on whether “ongoing low yields [will] steal your investment returns”.
The Mercer NZ conference will also be missing another familiar face on stage this year following the departure of veteran head of wealth and conference MC, Russell Garrett, who took up the role as head of Presbyterian Church Property Trustees this June.
Mercer subsequently named Adam McKenzie, formerly sales leader of the firm’s Australian institutional business, as new head of wealth.
The conference has been set down for October 15 at the usual Intercontinental Hotel venue in Wellington.