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1、Important Information:Your capital is at risk.In the UK issued by Threadneedle Asset Management Limited.Registered in England and Wales,Registered No.573204,Cannon Place,78 Cannon Street,London EC4N 6AG,United Kingdom.Authorised and regulated in the UK by the Financial Conduct Authority.Columbia Thr
2、eadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies.05.22|J32022|4735411columbiathreadneedle.co.ukOur most consistent priority:your successSuccess is more closely connected to consistency than ever.Our global investment team is built on a genuine cultur
3、e of collaboration,where experts challenge and debate their best ideas to make better decisions,leading to better outcomes for you.To all our clients,we have one message:your success is our priority.about a third of its value due to the impact of the conflict as the countrys currency has fluctuated,
4、and strict controls have been brought in to prop up the economy.By contrast,most big listed com-panies in the US and UK have not been directly affected by the crisis beyond fac-ing the knock-on effects of rising commod-ity prices or the costs of pulling out of the Russian market.The bigger problem f
5、acing global inves-tors in cases like Ukraine is uncertainty.So says Victoria Scholar,who is head of investment at the trading platform inter-active investor.“When signs of conflict emerge,there is a multitude of potential outcomes.They can range from a quick resolution,at one end of the spectrum,to
6、 a world war at the other.As a result,the market is attempting to discount all of these possi-ble outcomes with the more pessimistic forecasters understandably selling their investments,”she says.There are reasons to believe the war could further shake markets,however.For one,another sharp sell-off
7、is inevi-table if Russias aggression spreads beyond the Ukraine borders or if Moscow uses nuclear or chemical weapons.For another,the invasion is driving up inflation world-Brute forces:will warin Ukraine precipitatea stock market crash?Global markets fell sharply after Russia invaded Ukraine but qu
8、ickly bounced back.However,the war remains a threat to investors hen Russia invaded Ukraine in February it triggered a sharp sell-off on stock markets worldwide.The UKs benchmark FTSE 100 index fell by more than 7%from peak to trough in just under a month,as the West imposed severe economic sanction
9、s on Moscow and com-modity prices shot up.As of early April,however,the index had recovered to its 2022 highs,which was a pat-tern seen across stock markets.Other con-cerns have since begun to weigh on inves-tors minds,although measures of expected market volatility remain sharply lower than when th
10、e war began,indicating that inves-tors are less anxious about the crisis.Wars and dramatic geopolitical events usually spark an initial sharp sell-off but rarely have a prolonged impact on stock markets.US stockbroker LPL Financial shows that since 1941,the S&P 500 has fallen by an average of 5%,fol
11、lowing 20 major geopolitical events that included the attack on Pearl Harbor,the assassination of President John F Kennedy and the Septem-ber 11 terrorist attacks of 2001.In addition,large cap stocks in the US garnered average returns of 16.9%for inves-tors during World War II,6.4%during the Vietnam
12、 War and 11.7%during the 1991 Gulf War,according to research by Mark Arm-bruster,head of investment firm of Arm-bruster Capital Management.Typically,the index takes just 43 days to recover.“It is somewhat understandable that investors often run for the exits in the early stages of a conflict,”says J
13、ohn Simmons,a senior strategist at the investment bank William Blair Investment Management.“It is a natural human instinct to choose flight over fight in matters of a pocket-book or a retirement account.But blind investor panic can be a mistake that is advantageous to longer-term and funda-mental in
14、vestors.”This is in part because historically conflicts have tended to have a greater regional than global effect on markets,says Richard Dunbar,head of multi-as-set research at asset manager abrdn.For instance,Russias stock exchange has lost Fiona BondFreelance journalist writing on all areas of fi
15、nance and investing,including personal finance.Simon BrookeA freelance journalist covering business,finance,wealth management and sustainability.Tim CooperAn award-winning freelance journalist who has written for The Spectator,The Guardian and The Telegraph.Alec MarshAn author,journalist and editor-
16、at-large of Spears magazine,who contributes to titles as diverse as The Spectator online and The Field.Rich McEachranA freelance journalist coveringthe intersection of business,technology and sustainability for publications including The Guardian and Wired.Charles Orton-JonesPPA Business Journalist
17、of the Year,former editor of EuroBusiness,specialising in fintech and startups.Oliver PickupMulti-award-winning journalist specialising in business,technology,sport and culture.Chris Stokel-WalkerTechnology and culture journalist and author,with bylines in The New York Times,The Guardian and Wired.D
18、aniel ThomasA writer and editor with work published in The Telegraph,Newsweek,Fund Strategy and EducationInvestor,among others.wide at a time when the global economy faces a series of other threats,including slower growth,rising interest rates and a resurgence of Covid cases in China.“The biggest th
19、reat to markets is most aptly characterised as a confluence of many factors,”says William Blairs Sim-mons.“The war in Ukraine in and of itself is somewhere on the list of the threats to markets,but probably not right at the top.”Even before the war,the cost of liv-ing was climbing fast in many count
20、ries as pent-up demand from the pandemic pushed up oil and natural gas prices,dis-rupted supply chains and forced employ-ers to increase wages to counter staff shortages(all costs that were passed on to consumers).But the invasion is now add-ing to the pain,with the cost of living ris-ing at its fas
21、test rate in 30 years in the UK,raising fears of an economic slowdown.Its largely due to concerns about Rus-sian oil and gas supplies being disrupted,which has further pushed up global energy and fuel prices.Russia and Ukraine are also major exporters of minerals,energy,fertil-iser and foodstuffs,th
22、e costs of all of which have rocketed.In early April,the International Mon-etary Fund slashed its forecast for global economic growth in 2022 by nearly a full percentage point,to 3.6%.When it did so,it cited the Ukraine war and warned that inflation was a“clear and present danger”for many countries.
23、The response from central banks has been to raise interest rates.But that increases the cost of borrowing and invest-ing for businesses and must be handled delicately,says Scholar.“A major economic downturn has the potential to knock markets off course,particularly if central banks are forced to tig
24、hten monetary policy while global growth slows.”Investors are,naturally,cautious about the year ahead.David Jane is a fund man-ager at Premier Miton.He thinks that“a prolonged conflict as happened in Afghanistan is sadly on the cards,which may not bother markets too much as we think they are already
25、 expecting as much”.But he believes that sanctions are likely to persist,Europe will need to pay more for its energy and,with Russia demanding roubles or gold as payment for commodi-ties,“other countries are likely to want to demand the same”.While abrdn doesnt forecast any reces-sions in 2022,Dunba
26、r thinks“it doesnt take a huge leap of imagination to see how a recession might come about”.He adds that while a peace deal between Ukraine and Russia would be welcome for Ukrain-ians and markets,many of the problems faced by investors were there before the war and would remain after it.Scholar acce
27、pts its an uncertain time butwarns against knee-jerk reactions.The key,she says,is taking a long-term view and having a diversified portfolio.“Markets have survived throughout world wars,the Great Depression,the internet boom and bust and the global financialcrisis.“And as any seasoned investor will
28、 tell you:the markets have bounced back.”Distributed inPublished in association withAlthough this publication is funded through advertising and sponsorship,all editorial is without bias and sponsored features are clearly labelled.For an upcoming schedule,partnership inquiries or feedback,please call
29、+44(0)20 8616 7400 or e-mail .Raconteur is a leading publisher of special-interest content and research.Its pub-lications and articles cover a wide range of topics,including business,finance,sustainability,healthcare,lifestyle and technology.Raconteur special reports are published exclu-sively in Th
30、e Times and The Sunday Times as well as online at .The information contained in this publication has been obtained from sources the Proprietors believe to be correct.However,no legal liability can be accepted for any errors.No part of this publication may be reproduced with-out the prior consent of
31、the Publisher.Raconteur Media/wealth-management-2022raconteur/raconteur_Daniel ThomasWContributorsMARKETS MAY BE LESS VOLATILE DURING WARTIMECapital markets performance during wartimeI N V E S T M E N T M A R K E T SLead publisher Jamie OglesbyDeputy editorFrancesca CassidyReports editorIan DeeringS
32、ub-editorsNeil ColeChristina RyderCommercial content editorsLaura BithellBrittany GolobHead of productionJustyna OConnellDesign and production assistantLouis NassDesignKellie JerrardColm McDermottSean Wyatt-LivesleyManaging editorSarah VizardDesign directorTim WhitlockIllustrationCelina LuceySamuele
33、 Motta I N F L AT I O NA N T I-E S GD E F E N C E S T O C KSFive strategies to help wealth holders beat the effects of surging inflationSin stocks can boost the bottom line for investors who can stomach themHow war in Ukraine is challenging some investors notion of sustainable060812WEALTH&ASSET MANA
34、GEMENTDisclaimer:Content in this publication should not be used as financial advice-please ensure you always seek the help of a qualified investment adviser or financial professional22/05/2022#0804INDEPENDEN T P U B L I C AT I O N BYRACONTEUR.NETMark Armbruster/CFA Institute,2017RiskReturnLarge cap
35、stocksSmall cap stocksLong term bondsFive year notesLong term creditCashInflationAverage 1926-2013Large cap stocksSmall cap stocksLong term bondsFive year notesLong term creditCashInflation19.0%12.8%8.4%6.4%7.6%5.5%27.2%20.1%4.4%3.5%0.9%0.7%10.0%11.4%5.6%2.2%5.9%2.8%11.6%13.8%5.3%3.7%3.5%3.0%4.4%3.3
36、%Wartime 1926-2013&FINANCIAL ADVICE ASSOCIATIONPERSONAL INVESTMENT MANAGEMENT Blind investor panic can be a mistake that is advantageous to longer-term and fundamental investorsW E A LT H&A S S E T M A N A G E M E N T2Commercial featureand if desired.These principles have long been integral to our i
37、nvestment approach,but we recognise the need to evolve alongside a growing focus by clients and regulators on climate change risks,green taxonomies and thematic opportunities.We continue to enhance our capabili-ties,analytics and ESG integration in this regard,Ring says.Because of that broad approac
38、h,the firm has been able to significantly ramp up the number of Article 8 and Article 9 funds it is able to offer.“We feel very comfortable with that because our investment process already embraces and utilises those risk factors as an active consideration,”says Ring.“At the same time,we have to ack
39、nowledge that not all clients necessarily want Article 9 full impact funds.So,we still need to offer a spectrum of investment propositions,par-ticularly as a global investment manage-ment firm.In the US or Asia,for example,we havent seen the same bottom-up or even top-down regulatory traction drivin
40、g investor behaviour.”Bespoke investment solutionsAs well as demanding a greater focus on ESG matters,end investors are also increasingly expecting a more person-alised service.That is prompting wealth managers to offer more bespoke invest-ment propositions or model portfolios to different cohorts o
41、f clients within their overall client book,says Ring.“Maybe five or 10 years ago,wealth man-agers were just buying a range of pooled funds off the shelf that were offered by us or our competitors,depending on what products they wanted,”he adds.“Now wealth managers are taking owner-ship of the proces
42、s and saying were going to develop the investment proposition or were going to hire you as a sub advisor.That means theyre not just buying the pooled fund off the shelf;they are able to work with us and negotiate the exact details of the mandate they want.So thats creating personalisation in terms o
43、f their proposition to clients.”That is an advantage for firms such as Columbia Threadneedle who have vast experience offering segregated man-dates to institutional investors.“We are used to working with clients to develop bespoke investment solutions,with bespoke reporting on the back end,”says Rin
44、g.“In this case,its going through to a wealth manager versus going through to a pension fund or a sovereign wealth fund or whoever it might be.”While asset managers need to ensure they are responding to these evolving global trends,they also need to balance that with maintaining strong investment pe
45、rformance across their funds.For Ring,this means making sure fund man-agers have the necessary resources to do their jobs properly,while also investing in new talent and new systems to be more effective and organised.That includes investing in the firms data science capa-bilities to ensure fund mana
46、gers have the information they need to better under-stand what is going on in the world.Understanding client valueFund managers also need to better understand exactly what their clients want,particularly in light of the Financial Conduct Authoritys Assessment of Value initiative,which requires asset
47、 manage-ment firms to consider the overall value of an investment beyond its performance,such as the quality of service,costs and comparable market rates.“The assessment of value mechanism is really important for our clients,for both wealth management firms and their underlying investors,because it
48、is a for-malised and systematic process that looks at the overall proposition,”says Ring.This is especially important because investment performance can sometimes be oversimplified,says Ring.Take an income fund,for example.If a client buys such a fund,what they are looking for is an income stream,an
49、d capital growth is less important,he says.So,when con-sidering performance of an income fund,you need to consider the income stream and not just the capital.“Were always looking at the over-all proposition that were making to our clients,and then ensuring and validating that were delivering on that
50、 with invest-ment performance at the heart of it,”Ring says.Despite the growing demands clients place on wealth and asset managers,companies that act strategically to meet their needs will be able to provide greater value to clients for the long term.To find out more,visit How to meet the evolving n
51、eeds of the modern global investorClient demands are changing and asset management firms need evolve to continue to meet those expectationscross the financial services industry,an ever-expanding regulatory backdrop means the cost of doing business is continu-ing to increase.That is driving significa
52、nt change for wealth and asset management firms as they seek ways to reduce costs without compromising on client service.Trends like impact investing,personalisa-tion and bespoke solutions are creating new opportunities,such as the growth in consolidation among wealth managers.“That rising cost of d
53、oing business tends to drive a business model where economies of scale can play to your advantage,”says Nick Ring,CEO for Europe,Middle East and Africa(EMEA)at Columbia Threadneedle Investments.“So economies of scale are the impetus for the consolidation that were seeing and that is likely to contin
54、ue.There will always be small niche providers who can charge a premium for services,but there is a whole load of firms in the middle and it is hard for them to identify how to differen-tiate themselves other than on service.”That is creating conditions ripe for con-solidation that in turn can drive
55、bigger investments in technology that can help reduce costs further.Yet that is only one part of the picture;consolidation also means that as wealth firms get bigger,they look to engage differently with product providers like Columbia Threadneedle.“Firms are looking at how they can leverage off thei
56、r consolidated size but equally importantly,they understand that in order to maximise those economies of scale,they need to be doing business with a smaller number of product pro-viders who can offer a broader range of capabilities,”says Ring.“Theyre look-ing for more of a strategic alignment and pa
57、rtnership-type arrangement,because a)they are big enough to want to move from being in a client/provider relation-ship,to a strategic partnership relation-ship,and b)it helps to drive efficiencies within their organisation.”Product offering expansionFor investment management firms,that means ensurin
58、g they are able to meet these evolving client needs by expanding their product suite.That was one of the key drivers for Columbia Threadneedle in its acquisition last year of the Bank of Montreals(BMO)asset management business in EMEA,a deal which has seen the combined firms assets under man-agement
59、 swell to 531bn,according to Columbia Threadneedle Investments and BMO GAM(EMEA)as of 31 March 2022.“We absolutely understood that however good we were,we can always be better,and we can always improve our proposition for our clients and better position ourselves for that dynamic of a smaller number
60、 of consol-idated wealth managers wanting to do more business with fewer providers,”says Ring.While Columbia Threadneedle has tra-ditionally offered a range of open-end funds,it didnt offer any closed-end funds such as investment trusts.Last years acquisition gave the company a broader range of inve
61、stment capabili-ties and structures,such as alternative assets including European real estate and private equity,and established liability driven investment and fiduciary manage-ment businesses in Europe.“Bringing in the BMO business has allowed us to offer a broader range of capabilities and vehicl
62、es in terms of investment trusts,and therefore we can say to wealth managers we can now offer you even more within a single integrated client proposition,”Ring says.Increased sustainability focusAnother major trend that is reshaping investment managers product offer-ings is the rise in environmental
63、,social and governance(ESG)awareness and an increased demand for sustainable invest-ments.That was another catalyst for Columbia Threadneedles acquisition of BMO GAM(EMEA),which shares the firms commitment to responsible investment and how that is integrated into its invest-ment approach.While both
64、firms have long had ESG baked into their DNA,the urgency among wealth managers and end investors to act on the ESG agenda is a relatively recent trend,driven in part by European regulators and the Sustainable Finance Disclosure Regulation(SFDR).The new regulations are designed to increase transparen
65、cy around ESG products,with funds being assigned different categorisations(Article 6,8 or 9)depending on the scope of their ESG content.Article 8 funds,for example,can include investments that broadly pro-mote environmental and social goals,while Article 9 funds must target specific sus-tainable inv
66、estments.“Regulators have realised they have an important role to play in driving the utilisation of ESG considerations within capital markets,”says Ring.“Thats a very top-down push,but there is also the bot-tom-up effect where a lot of individuals are becoming more aware of ESG risks and an appreci
67、ation that things need to change and that investors have a role to play in that.”That top-down pressure from regu-lators and bottom-up interest among end investors means wealth managers are increasingly demanding more ESG-certified products.“Weve been surprised about how quickly wealth managers have
68、 embraced this,”says Ring.“Theyre saying that products they have been very happy to invest in for a long period of time,which already had ESG credentials,need to be encased in a formal Article 8 structure and if you cant commit to that by a cer-tain date,we will move the money out of the fund.”Colum
69、bia Threadneedles approach is not to simply split its funds into ESG and non-ESG products,but to integrate ESG risk factors and considerations into its entire investment process across the firm.“We believe that companies which demonstrate sustainable business models,organisational stability,and the
70、ability to drive change where necessary are best placed to deliver long-term value.In its simplest form,the consideration of envi-ronmental,social and governance factors,alongside financial information,allows us to build a holistic picture of the risks and future return prospects of any invest-ments
71、 we make.In a more targeted way,it also allows us to select investments that can help achieve specific outcomes when A Regulators have realised they have an important role to play in driving the utilisation of ESG considerations within capital markets We absolutely understood that however good we we
72、re,we can always be better,and we can always improve our proposition for our clientsESG INVESTING REQUIRES A MINDSET AND REGULATORY CHANGE FOR WIDESPREAD IMPLEMENTATIONThe barriers to adoption are largely pointed toward growth considerations and regulatory frameworksRegulatory constraints have becom
73、e a growing barrier to the adoption of ESG investment strategiesEuropean investment strategies around ESG are diverse2019 22%HSBC,2021 PwC US,2021Deutsche Bank,2021BNP Paribas,2021 40%59%of global executives cited balancing ESG with growth targets as the largest barrier to ESG investingof investors
74、say they pursue ESG strategies to aid their brand and reputation,the leading factor globally,and up from 47%in 20192020 25%Integrate ESG factors 56%Impact investing 6%Best-in-class ESG investing 18%202132%No ESG investing 6%Exclusion of sensitive sectors 15%Past performance is not a guide to future
75、perfor-mance.The value of investments and any income is not guaranteed and can go down as well as up and may be affected by exchange rate fluctuations.This means that an investor may not get back the amount invested.Your capital is at risk.This material should not be considered as an offer,solicitat
76、ion,advice or an investment recommendation.This communi-cation is valid at the date of publication and may be subject to change without notice.Information from external sources is considered reliable but there is no guarantee as to its accuracy or completeness.Issued by Threadneedle Asset Management
77、 Limited.Registered in England and Wales,Registered No.573204,Cannon Place,78 Cannon Street,London EC4N 6AG,United Kingdom.Authorised and regu-lated in the UK by the Financial Conduct Authority.Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of compa
78、nies.R A C O N T E U R.N E T3MANAGING ETHICALINVESTMENTSESG IS STILL OUTPERFORMINGS&P 500 ESG index compared to S&P 500 indexINTEGRATION,EXCLUSION AND EVERYTHING IN BETWEENMain ESG strategies implemented worldwide in 2021,by investor typeActive ownership34%35%Impact investments34%42%Best-in-class se
79、lection32%40%Thematic investing28%43%Mar 2019Mar 2020Mar 2021Jun 2019Jun 2020Jun 2021Sep 2019Sep 2020Index points(100=Oct 15,2018)Sep 2021Dec 2019Dec 2020Dec 2021We do not implement ESG28%23%Integration48%54%Exclusionary screens40%42%Lack of comparability or ESG data across issuersS&P 500 ESGS&P 500
80、20040%20%202020192021THE OBSTACLES TO INVESTING ETHICALLYMain obstacles to broader adoption of ESG investing worldwide15010050S&P Global,2022Natixis Investment Managers,2021HSBC,202130%Fund selectorsRegulatory or legal constraintsShortage of expertise or qualified staffInstitutional investors28%22%2
81、4%23%21%24%13%28%21%17%60%63%29%38%MAKING ESG MEASURABLETools to measure non-financial ESG performance in 2021,by investor typeNatixis Investment Managers,2021Fund selectorsInstitutional investorsLack of attractive investment opportunitiesPoor quality or availability of ESG dataESG is a growing conc
82、ern for private investors.As data and visibility improve and regulation becomes more refined,investors can expect increased scrutiny around sustainability targets.So how are managers working ESG into their investment strategies?What obstacles are standing in the way?And what technologies are helping
83、 make investments more ethical?CLIMATE ACTION TAKES PRIORITY AMONG ESG FUNDSTop five targeted Sustainable Development Goals(SDG)of ESG ETFs worldwide,by asset valueTrackinsight,2022Peace,justice and strong institutionsClean water and sanitationClimate actionAffordable and clean energyIndustry,innova
84、tion and infrastructureNon-government organisationsOutsourced consultantsNews and mediaRegulatory filingsIt has not become easier to benchmark ESGSustainalytics,MSCI ESG or other third-party rating/awardsReports from the issuer/company$10.7bn$14.2bn$25.3bn$26.7bn$112.2bn50%W E A LT H&A S S E T M A N
85、 A G E M E N T4The concept of the three stages of life needs rethinking.To make the most of the opportunity requires a shift in mindset anda change in investment strategygeing was much simpler in the olden days.For centuries,if not millennia,most peoples lives have been accomplished in three stages:
86、learning,which leads to employment,then retirement.But in 2022,largely thanks to the wonders of technology and improved healthcare,the notion of old age is evolving.Life is all the more thrilling.And the supposed retirement age should be embraced as an additional phase of life,one of newfound freedo
87、ms,whether hobbies,businesses or passions.Retirement is no longer a period of wind-ing down or dependence.On the contrary,the concept will soon expire,contends Andrew Scott,a world-leading expert on longevity and professor of economics at London Business School.Theres no need for pipe and slippers i
88、n the 21st century.The latest Office for National Statistics(ONS)data shows the number of people in the UK aged 85 and over was a record 1.7 million in 2020.That amount is projected to almost double to 3.1 million by 2045.Additionally,the ONS calculates that life expectancy at birth in 2020 was 87.3
89、 years for males and 90.2 years for females.Con-sider,at the start of the 1980s these figures were 70.8 and 76.8 years,respectively.Rising life expectancy and population age go hand in hand.And this trend is glob-al:the world populations median age in 1970 was 21.5 years,and almost 31 in 2020,accord
90、ing to the United Nations Population Division.But,to make the most of the pos-sibilities of old age,its critical to take action today for a more rewarding tomor-row,Scott says.“Now there is a greater risk you may out-live your wealth,”he says,referring to squir-relled-away savings and pension pots t
91、hat have been the typical source of funds for retirees.“So you need to invest more in your future self.One of those key investments is finance,but developing good health,skills and relationships all play important parts.Any financial plan,though,should be dic-tated around your life plan.”In 2016,The
92、 100-Year Life a book authored by Scott and Lynda Gratton,a pro-fessor of management practice at London Business School was published.And while new opportunities is the ultimate goal for most of us,the reality is that dream can be killed by poor health.Mdd worries people often take a“head-in-the-san
93、d approach”to monitoring their health.He points out that a quarter of people in the UK over the age of 70 will require lengthy healthcare.“Its a subject that people dont like to think about,but long-term care can be very expensive,costing hundreds of thousands of pounds,”he warns.“Lots of people in
94、the UK are sleepwalking into a position where they will not get the level of care they think they should receive from the local authori-ty,so will have to pay for it themselves.That could drain their childrens inher-itance.You can take out insurance,but people tend not to do that.The only way,then,t
95、o deal with long-term care is effec-tively to save money.”Moving swiftly away from the gloomy topic of impending death is Michael Clin-ton,the longtime president and publishing director of Hearst Magazines.His book,ROAR:Into the Second Half of Your Life was recently published,in September 2021.And t
96、wo years shy of becoming a septuage-narian,he is definitely accelerating,not pumping the brakes.He counters the thinking that people have midlife“crises”but rather that they are“awakenings”.Clinton explains:“At 50,you know a lot about yourself.Now is the time to tap into your awakened self and move
97、forward.If you are 50 and healthy,you will have a pretty good shot of living to be 90.That will mean second and third careers,new relationships and life-styles.Suddenly,people are saying:I dont want to retire;I want to rewire.I want to wind up,not wind down.”Scott agrees with this view.“Retirement i
98、s no longer seen as a binary outcome namely,you dont stop working when you retire now,”he says.“Retirement used to be like a cold shower,and now people want more of a warm bath.Supposed retirees often work part time with their existing employer or start up something themselves.Also,within two years
99、of retiring,one in five people un-retire.”He concludes by predicting the demise of retirement.“If you think about the 100-year life,there must be a movement away from a three-stage life education,work,retire-ment to a multistage life.”Scott adds:“Before long,we will reach the point where the concept
100、 of retirement if you define it as the permanent cessation of work will itself be retired.”tancy,suggests that pension schemes are a good idea,but that you can tailor contribu-tions to match your earning potential.In your 50s,you are likely to be in a better financial position than in your 20s,so wh
101、y not bump up your input?And while a pension will provide a decent chunk of income for many people in later life,its far from the only source.Mdd stresses the benefits of a diversified portfo-lio of tax-efficient investments,maybe in property or other assets.He notes,though,that while a later life p
102、acked with adventure,excitement and rather than chronological age,”says Scott.“And we also need to consider prospective age more that is,the number of years we have left to live.For instance,the average Brit has never been so old but never had so long left to live this is how we have to adjust our t
103、hinking.”Clearly,good health and good wealth are mutually reinforcing for a life lived as long and as fully as possible.But does this require both a shift in mindset and a change in investment strategy?For instance,Tony Mdd,divisional director for St.Jamess Place development and technical consul-its
104、 often said“age is just a number”,could it be that we have been using the wrong meas-urement all along?“It was randomly decided that 65 is old,”continues Scott,“and the older I get Im in my 50s the more I dislike that as a starting point.While more people live for longer,that doesnt consider changes
105、 in how we age,either our health or our behaviour.”He believes that how we define old age“requires a rethink because traditional age,measured chronologically,is confusing”and often misleading regarding life expec-tancy.“We need to focus on biological age Oliver Pickup Before long,we will reach the p
106、oint where the concept of retirement if you define it as the permanent cessation of work will itself be retiredP L A N N I N GAvery year,PIMFA works with the industrys best up-and-coming talent to con-duct research into trends and develop-ment within the wealth management and financial advice sector
107、.These tal-ented individuals have spent eight months investigating changing atti-tudes and behaviours to investing across the generations,and examined how to promote a culture of saving and investing within the UK.This year,the focus is on the impact of ESG factors for investors across the generatio
108、ns.The research,conducted with market research firm Savanta,looks at how clients want to be commu-nicated,as well as the rising influences of both technology and social media on investing attitudes.The findings show that 81%of peo-ple across all generations rate ESG factors as either very important
109、or important drivers of their invest-ment and other purchasing decisions,but there is a significant divide among the generations.Almost three-quar-ters(72%)of investors aged between 18 and 25 say all or part of their existing investments should aim to positively impact the environment or society.Thi
110、s compares with just 29%of those aged between 56 and 75,and 21%of those aged 75 and over.There also remains a significant gap between men and women with respect to their perceived levels of con-fidence and knowledge when it comes to investment decisions.More than a third(37%)of women tell us they do
111、 not invest at all,compared with only 26%of men.This presents an enormous opportunity for the industry,with the Centre for Economics and Business Research estimating that,by 2025,60%of Britains wealth will be in the hands of women.The research also finds that younger people have surprisingly high le
112、vels of confidence when investing.This has increased markedly over the past few years and is a potential indication that financial education is slowly starting to hit the mark.But caution is needed and there is more work still to be done because the research also illustrates that younger generations
113、 are basing their investment decisions on unreg-ulated information often obtained through social media.This can be seen in the fact that two-fifths(40%)of investors aged 18 to 25 hold investments in new and highly volatile assets,such as cryptocurren-cies,that their risk appetite cannot support.This
114、 is in contrast with older UK investors,who tend to put their money in more traditional invest-ments.For example,some 43%of investors in the 56 to 75 age range and 60%of investors aged 75+hold invest-ments in Premium bonds,compared with just 19%of 18-to 25-year-olds.The research suggests wealth man-
115、agers and professional advisers need to make greater efforts to communicate with younger investors to demonstrate the value of traditional investments and regulated advice.To do this,they need to use new methods of communi-cation that resonate with the younger generations,such as investment apps and
116、 social media channels like Tik-Tok,Instagram,YouTube and Twit-ter.Another recommendation is that wealth managers develop and market separate products specifically tailored to young investors and those without significant sums to invest.What is clear from this research is that ESG is of great import
117、ance across society and that there are three big opportunities waiting for the wealth management and financial advice industry to seize.First,to harness ESG investing as a catalyst to encourage more women to invest.Second,to use ESG as both an educational and a prac-tical tool to stimulate a much br
118、oader culture of savings and investment in the wider market.Third,to revitalise communication techniques to attract and retain new generations of inves-tors.Together,this can help to bridge the advice gap hampering our indus-try and help people across the UK build their personal financial futures.We
119、 need to make greater efforts to communicate with younger investorsLiz Field chief executive PIMFAI N S I G H TEUK RETIREMENT PLANNINGExpectations of achieving target retirement income in the UK as of 2020On course to achieve around three-quarters of targetOn course to achieve around quarter of targ
120、etOn course to achieve retirement income targetOn course to achieve around half of targetDont know if on course to achieve target24%10%12%15%38%Aegon,2020 The average Brit has never been so old but never had so long left to liveAleksandarNakic via iStockNew age retirementPrint media cant generate le
121、ads.WWr ro on ng g.Some of the advertisers in this report will generate over 200 leads thanks to Raconteurs integrated print and digital campaigns.Email to find out more.R A C O N T E U R.N E T5Tailored to fit:the future of wealth managementompetition is increasing in the wealth management sector.A
122、recent survey by Netwealth,a tech-nology-powered wealth manager,shows that a third of wealth manager clients are considering switching advisers.And its the best-off who are the most discontented.Managers are now turning to hyper-person-alisation to improve their propositions and cement client relati
123、onships.Using AI,data analytics and automation,hyper-personalisation helps wealth manag-ers to streamline portfolio management and make those portfolios relevant to the exact needs of the client.In the same way that Netflix suggests movies for customers based on their previous choices,hyper-per-sona
124、lisation factors in a clients investment goals,income and life situation.It goes fur-ther by considering a clients specific inter-ests in,for example,ESG investing and emerging markets.Alongside this,behavioural science and sentiment analysis mean that wealth man-agers can now define the exact risk
125、profile of each client more accurately.Younger savers expect to have the ability to track their investments whenever and wherever they want,using almost any connected device.Advocates of hyper-personalisation say that its ability to create bespoke investment options can also build trust,which makes
126、it easier to improve client retention and man-age intergenerational wealth planning.In a recent survey by Forbes Insights and banking software provider Temenos,82%of respondents said that wealth managers who adopt hyper-personalisation are more likely to succeed than those who dont.And 45%of those w
127、ho took part in the survey said that this technology would change their financial guidance.Many wealth managers are aware the tech giants are speeding ahead with developing and adopt-ing the new technology and they dont want to be left behind.Typical of these new providers is Adde-par,founded over c
128、oncern about transpar-ency following the 2008 financial crisis.With more than 700 wealth managers han-dling a total of$3tn(2.38tn)of assets on its platform,it presents a clients entire rele-vant information on an integrated dash-board.It pulls in data from various sources,verifies then integrates it
129、,allowing the wealth manager to present clients with accurate and personalised options.The aim is to have a conversation with clients and develop a narrative not just to show them graphs and statistics.Yet preparedness for this ongoing shift differs among regions,according to Russell Andrews,global
130、head of advice solutions at SEI Asset Management Distribution.“Markets that continue to be dominated by mutual funds are inherently less able to support true personalisation at an asset management level.They rely on engage-ment to meet the need,”he says.“But evolved markets,which already embrace sep
131、arately managed accounts and other Hyper-personalisation technology provides wealth managers with the ability to provide a personalised service to clients.But it has its drawbacks more sophisticated implementation mod-els,have an existing infrastructure better equipped to apply portfolio personalisa
132、tion.”At a minimum,wealth managers need to start personalising their offering beyond generic products and services.At best,irrel-evant offerings and advice will annoy cli-ents.At worst,and as regulations continue to be tightened,they might lead to allega-tions of mis-selling.In the absence of an obv
133、ious standard solution in the past,many wealth managers have been building their own,says Jay Venkateswaran,business unit head,banking and financial services at business process management company WNS.“If you look across the top 15 wealth man-agers,they probably have 15 different solu-tions,”he says
134、.“As well as adding their branding,this allows each wealth manager to tell a particular story to their client.These tools give them the ability to tailor that conversation and go beyond looking at charts to provide insights and explore sce-narios.For instance,they can show a client what will happen
135、to them if they stop work-ing at a specific age or if they decide to change their investment strategy.”Increasingly,hyper-personalisation allows clients of wealth managers to model these different scenarios themselves.How-ever,many wealth managers are still not exploiting the full potential of the t
136、echnolo-gy to cross-sell and upsell.This is partly because extensive M&A in the sector means that legacy systems havent been integrat-ed.“Many wealth managers miss a trick because they havent identified that a client might benefit from an insurance product or that a mortgage customer might have exte
137、nsive savings,”says Venkateswaran.“As well as improved integration of technol-ogies,better data analytics are needed to help asset managers service clients better and to improve their sales.”One potential mistake,says Andrews,which is not exclusive to asset managers,is to build a solution that nobod
138、y wants,understands or values.“Asset managers have significant intellectual property and expertise in navigating investment markets and managing portfolios,”he says.“That doesnt necessarily translate automatically into solutions that meet the needs of advis-ers and end-investors.”There are other cha
139、llenges.Hyper-per-sonalisation relies on large amounts of data the more of it that the wealth manag-er has,the more personalised their offer.But data privacy continues to be a contro-versial issue.At the higher and therefore more profitable end of the market,an added complication is that high net wo
140、rth individuals are likely to have assets in different jurisdictions,each of which might have its own regulatory require-ments,especially if not governed by GDPR or adequacy decisions.“Its critical to work hard to understand the exact personalisation needs of advisers and investors for today and the
141、 future,”Andrews says.And then,find the right innovative solutions to deliver them.STREAMLINING INVESTMENT DECISION-MAKINGShare of wealth management clients who agree technology has improved investment decision-making,by regionEY,2021Simon BrookeCommercial featurehe UK has faced its fair share of un
142、precedented challenges in recent years,from the implementation of Brexit to the con-sequences of the global Covid-19 pan-demic,but the change and uncertainty has done little to dampen foreign inter-est in the UK as a destination of choice in which to live and invest.The UKs position as a fi nancial
143、hub for trade and wealth is far from a new phe-nomenon;indeed,Britains non-dom-iciled regime whereby residents can live in the UK while continuing to have their primary home or domicile outside of the country can trace its roots back to the 18th century.While the rules have changed considerably sinc
144、e they were fi rst introduced to shelter those with foreign property from wartime taxes,the appeal of the UK for high net worth and ultra-high net worth individuals remains undiminished.Armando Rosselli,head of wealth advisory and UK resident non-domiciled(RND)clients at Standard Chartered Private B
145、ank says:“The language,cul-ture,high quality educational system,access to capital markets,a stable rule of law and a strong regulatory frame-work are seen as key attractions for for-eign domiciliaries.Additionally,London is home to a wealth of fi nancial special-ists.It is,in short,a global boutique
146、 for private wealth.”Despite concern that the govern-ment crackdown on the RND popu-lation with the abolition of limitless non-domiciled status in 2017 would lead to a mass exodus,wealthy individ-uals continue to target the UK.Data from HM Revenue&Customs revealed there were 75,700 individu-als with
147、 resident non-domiciled status in 2020,contributing almost 7.9bn in income tax,capital gains and national insurance receipts.However,this fi gure does not refl ect the full contri-bution that these individuals and their businesses make to the UK economy as a whole.In addition to their invest-ment in
148、 the UK property market,arts and culture,their role in job creation,human capital development and diver-sity cannot be underestimated.“In the wake of Brexit,the UK has sought to position itself as a global,free trade economy and foreign invest-ment will be vital to achieving this.While some RND weal
149、th is inherited,a great proportion today is generated through business and entrepreneur-ship,and this has untold benefi ts for UK economic growth,”Rosselli says.“Its important that the UK continues to create a welcoming environment for individuals and families to access the type of support and servi
150、ces that put the UK ahead of other jurisdictions.”Understanding UK tax requirementsWith this infl ux of new arrivals to the UK coming from Africa,Asia and the Middle East,RND individuals and fam-ilies are increasingly looking for a pri-vate bank with an extensive knowledge that can support them both
151、 at home and abroad.Moving to a new country,particu-larly from emerging markets,can be a daunting and complex undertaking.The UK tax system can be diffi cult to nav-igate,especially for clients from juris-dictions around the world where little or no tax is due on income and gains,so it is vital that
152、 they have access to suita-ble advisers to ensure they understand the implications of UK tax.Under current rules,a UK RND elect-ing to pay on the remittance basis only pays UK tax on money earned in the UK but is not subject to tax on money made overseas,unless they choose to bring or benefi t from
153、these monies into the UK.If a RND chooses not to pay tax in the UK on overseas income and gains,they must pay an annual charge of 30,000 if they have been resident for at least seven of the previous nine tax years,and 60,000 if they have been resident for at least 12 of the pre-vious 14 tax years.St
154、andard Chartereds footprint across,Asia,Africa and the Middle East puts it in a unique position to provide private banking services to both new arrivals and existing RND clients out of its London Advice Centre,allowing clients to retain the same team and touchpoints they had in their country of domi
155、cile.Rosselli says:“Our London Advice Centre offers a wealth of investment opportunities,ranging from equities,fi xed income,structured products,mutual funds,exchange-traded funds and also wider discretionary and advi-sory solutions and often clients from emerging markets will also retain an appetit
156、e for investments in their region or country of domicile,for example African debt or sustainable investing focused there,which we can provide access to.”He adds that RND clients may be familiar with the investment arrange-ments in their country of domicile and may want to continue investing in that
157、same manner.“As a private bank,it is critical that clients have access to local knowledge and markets and work along-side a team that has an understanding of their culture and investment prefer-ences and behaviours”he says.Understanding the tax,investment and banking intricacies of moving to the UK
158、can make a huge difference to how RND clients navigate their move and establish themselves in the UK.The impact of technology and globalisationTo ensure the British fi nancial services industry remains a persuasive player in international fi nance,there has been a sense of urgency among private bank
159、s to move to a more technology-driven,client-centric business model.While fi nancial services have often stood accused of being slow to adopt digi-tal transformation,the speed at which digitisation is shaping every aspect of business means banks cannot afford to be passive.For Standard Chartered,tec
160、hnol-ogy plays an invaluable role in enabling clients to overcome the challenges of establishing a new banking relationship in a foreign country.“In a lot of cases,RND individuals will need their off-shore bank accounts to be structured in advance so to identify different types of returns from a UK
161、tax perspec-tive,”Rosselli says.“Whilst we do not give tax advice,our technology enabled platform is based on safeguards which automatically segregate cashfl ows.This level of automation reduces the likeli-hood of manual errors and decreases the administrative burden for cli-ents and managers,meanin
162、g there is greater focus upon building and nur-turing client relationships face to face for mutual benefi t.”But while private banks are tailoring their proposition to meet the growing needs of RNDs,Rosselli believes the gov-ernment can also do its part to help the UK retain and enhance its position
163、 as an attractive and stable location for entre-preneurs to establish and grow business.He says:“With the world becom-ing increasingly globalised,there is tougher competition between juris-dictions to attract and retain private wealth and entrepreneurs.At present,there is a great deal of wealth that
164、 sits outside of the UK and whilst we have seen some reasonable success with the Business Investment Relief,more should be done to facilitate inward investing and reduce hindrance to entrepreneurship,a challenge the gov-ernment should look to take on.”Rosselli also believes the UK would benefi t fro
165、m a clear,fair and respected system of immigration,which would widen opportunities for direct invest-ment into the UK,including attract-ing private wealth,following the gov-ernments decision to scrap the Tier 1 investor visa.“As with many other global econo-mies,the UK has endured diffi cult times o
166、f late and we dont want to lose our position as a global fi nancial epicentre.Creating a supportive and welcoming environment for foreign domiciliaries will ensure that it continues to attract wealth and investment,”he concludes.Despite the challenges of the past few years,and changes to the UKs vis
167、a system supporting foreign investors,the UK remains a promising location for RND investors,particularly because of the strength of its banking infrastruc-ture and fi nancial services sector.For more,please visit http:/ the UKs fi nancial sector continues to woo foreign investorsIn the quest for res
168、ident non-domiciled clients,UK private banks will need to put technology and a customer-centric approach at the heart of their propositionCommercial featureTLondon is home to a wealth of fi nancial specialists.It is,in short,a global boutique for private wealthindividuals with resident non-domiciled
169、 status were recorded in the UK in 202075,700(HMRC,2021)in income tax,capital gains and national insurance receipts was paid by these 7.9bnT E C H N O L O GYC Markets that continue to be dominated by mutual funds are inherently less able to support true personalisation Jetta Productions Inc via Gett
170、y ImagesLatin America83%North America51%Middle East62%Asia-Pacific65%Global57%Europe52%W E A LT H&A S S E T M A N A G E M E N T6Five strategies to beat inflationUdandame laut adipis ent,oditas alitiamou dont need to be told that infla-tion is high at present.It wont have escaped peoples attention th
171、at increasing fuel prices,higher house-hold bills,interest rates and taxes have increased all of which are contributory factors to the 9%headline inflation rate were all being squeezed with at present.Its the highest rate of inflation in decades.There are suggestions that soaring highs have yet to r
172、each their peak.The Office for CommoditiesOne of the key reasons were seeing ram-pant inflation not encountered in decades is because of the increase in the price of everything from the stuff we fill our cars with,to the food we fill our stomachs with.Commodities like oil and wheat have seen prices
173、rise farther and faster than inflation in 2022,driven by the war in Ukraine.A barrel of oil priced on the Brent crude benchmark rose 43%from$78.98 at the start of January to$113.16 by 18 April far out-stripping inflation.And had you bought at the start of the year and sold at its peak so far this ye
174、ar,youd be 62%up.Wheat prices have seen similar rises as supplies which come from Ukraine and Russia have been disrupt-PropertyNothing is sure when it comes to invest-ments but one of the surest bets in liv-ing memory has been property.“As for real estate,we know property prices usually only move in
175、 one direction,”says Aslam.“Yes,there have been some instances where we have seen property prices crashing but they do bounce back sharply.”For those worried about indi-vidual fluctuations that can impact them directly,Aslam suggests diversify-ing portfolios by looking into real estate investment tr
176、ust(REIT)products,which are designed to hedge bets.Rental property has become an alter-native investment class for many who can purchase a second home or afford the mortgage.There are more than 2.5 million private landlords in the UK,who provide housing for an estimated 13 million people across the
177、UK,according to lobby group Generation Rent.Rental prices rose by 2.4%in the past year,according to the Office for National Sta-tistics factors higher than the average savings account over the same period.While achievable rental income is unlikely to increase by the same amount as inflation,it has h
178、istorically out-stripped bank account interest rates and seems likely to continue to do so.“The UK property market has experienced significant growth over the past few years and many investors are looking towards property as a way to beat high rates of inflation,”says Derek Pratt,commercial director
179、 of Sourced Capital.Of course,increasing purchase prices for homes make it more difficult for those without the highest incomes to invest in property in the first place.Although TikTok and YouTube influenc-ers may recommend compounding your potential returns by taking out mort-gages that are paid of
180、f with the income from tenants in your property,bear in mind that theres no guarantee your rental property will be filled 12 months out of the year meaning it could some-times be difficult to stump up the cash you need to repay.Real assets“Artworks and other collectibles such as classic cars can be
181、a great inflation hedge,”says Morrison.“Such real assets have already done extremely well,thanks to the monetary and fiscal stimu-li ushered in after the pandemic.”Those real assets not only have the benefit of being tangible meaning that they will always be there,even if their value should hollow o
182、ut.They are also something you can see,touch and inter-Enterprise Investment SchemeOne potential route for inflation-busting investment that many people havent heard of and often overlook is the Enterprise Investment Scheme(EIS).The scheme is a government-backed initiative that gives individuals tax
183、 relief for buying new shares in qualifying companies.By buying into small com-panies at an early stage of their growth,theres the potential for a large return.Its been around for more than 25 years and was brought in by the government to kickstart investment in early-stage busi-nesses.In all,more t
184、han 24bn has been invested into 35,000 businesses.“Investors in EIS-qualifying compa-nies benefit from upfront and ongoing tax reliefs,including up to 30%income tax relief,capital gains deferral,loss relief,inheritance tax relief and tax-free growth on exit,”says Jonathan Prescott,director at Praetu
185、ra Ventures.Those who invest in the EIS are also able to carry back income tax relief against their previous years income tax bill.Its an alternative to the traditional angel investment route that many com-panies choose,while also being an opportunity for individuals to dip their toe in the water wh
186、en it comes to buying InfrastructureEven as many key elements of the economy slow or halt due to pressures from inflation and evolving lifestyles,one thing will con-tinue to be in demand,regardless of the eco-nomic situation.Infrastructure is always needed to keep the world going.Investors can acces
187、s assets tied to infra-structure via open-ended and closed funds.Closed funds are more beneficial,in large part because it enables investors to own what are comparatively illiquid assets with-out having to sell them when investors into that infrastructure want to cash out.The sector is a growing one
188、,with almost all of the 30 or so infrastructure investment trusts listed in London set up in the past decade.Trying to stop losing money in real terms at times of high inflation is tricky but here are five ways you could tryChris Stokel-WalkerBudget Responsibility(OBR),the independ-ent overseer of t
189、he UKs finances,has indi-cated it believes inflation could rise even further by the end of 2022 because of the ongoing war in Ukraine.Such highs would have“major repercussions for the global economy”,the OBR says.And thats the optimistic view:the Bank of England has said it fears inflation could ris
190、e further,to around 10%this year,given the inevitabili-ty of the energy price cap rising in October.ed.Of course,the price of commodities can be highly volatile,meaning they can often drop as much as they rise.Yet they tend to be a place money goes in the face of inflation.“In years gone by,when inf
191、lation has picked up,investors have often turned to tangible assets likely to rise in value,such as com-modities,”says Naeem Aslam,chief market analyst at AvaTrade.But if not investing directly into the trad-ed commodities,its possible and some-times safer to hedge ones bets by building out your sha
192、re portfolio to be populated with different companies that have connec-tions to the production and distribution of commodities.Mining-focused exchange trading funds(ETFs),or those focused on energy firms in the FTSE 100 or S&P 500,act with,rather than simply sitting behind a screen on your bank acco
193、unt or a share trading app.A portfolio would not solely be made up of real assets,according to experts.In an ideal world,they would account for between 10%and 20%of a persons entire investment.Its worth bearing in mind that property is also a real asset,which can quite easily bump up overall exposur
194、e to real assets.“I would also put into that category land and even physical things that into startups.“Over the past couple of decades,a significant number of compa-nies have raised capital on a deal-by-deal basis,attracting significant investment from angels,”says Prescott.“However,as EIS becomes
195、more mainstream and accessible,fund man-agers have professionalised the invest-ment opportunity and offer investors access to a diversified portfolio of EIS-qualifying companies,with the objective of mitigating risk via a portfo-On average,infrastructure funds have returned 11%over one year,49%over
196、five years,and 196%over the past decade.If you dont want to buy into infrastruc-ture investment trusts,there are alterna-tive access points.One such is to buy into individual companies that provide the infrastructure themselves.“Water and energy companies can do well during inflationary periods,”say
197、s David Morrison,senior market analyst at Trade Nation.“People may work hard to try to cut back on these basic necessities as prices rise but overall,such action does little to dent demand.”The ability for water and energy suppliers to raise prices in line with their costs,price caps permitting,is a
198、lso a boon for investors.It means that spenders are getting less bang for their buck,with average pay rises lagging inflation.As for savers,theyre losing out significantly,with high street interest rates on savings accounts coming nowhere near to matching the rate of inflation.It all means that peop
199、le are losing money by keep-ing their cash in bank accounts.What should savers do to try to stay ahead of the game?Here are five strategies that could beat inflation.can often insulate investors from some of the more significant shifts in price.One other perceived safe harbour for investors looking
200、to beat inflation in times of turmoil has long been a popular investment option.“It comes as no surprise that inves-tors have flocked to gold as inflation begins to spiral,”says Jai Bifulco,chief commercial officer at Kinesis Money.“Gold is doing what it always has done in providing a stable and end
201、uring store of value to hedge against inflation and currency devaluation.”Over the past 50 years,gold has had an average gain of 10.6%every year.“Precious metals have been the asset class of choice when hedging inflation,”says Bifulco.“As access to gold increases,there is no reason not to safeguard
202、your wealth in uncertain times.”might hold their value over long periods such as antiques or classic cars,”says Morgan.Yet just as you need to beware not to overexpose yourself to such assets,Morgan cautions against diving headlong into the sector without some research.“Specialist knowledge is often
203、 needed here,”he says,“but if any of these areas are your thing then it might be a good place to put your money over the long term.The downside tends to be the inability to buy or sell quickly and the costs involved in doing so.”lio approach to investing.”He points out that,while“the potential upsid
204、e for investors can be considerable,invest-ing in early-stage businesses comes with risk and must be balanced against their own risk appetite”.Thats a warning to bear in mind for every option on this list,and one worth considering when trying to beat the ris-ing cost of living.Sometimes its better t
205、o be safe than sorry,and to take fewer losses than others.“But perhaps their biggest advantage is their existing infrastructure,which takes years to establish and is expensive to main-tain,”says Morrison.“While that could be a downside,it is also a barrier to new market entrants,which helps protect
206、infrastruc-ture companies from fresh competition.”You can also buy literal infrastructure in the form of land.“Generally,its best to invest in productive assets such as land,property,infrastructure,and shares as they produce cash flow which can be used or reinvested,”says Rob Morgan,chief analyst at
207、 Charles Stanley.Not only can you poten-tially generate short term revenue from rental income for a business on your land,but its also an asset that can be sold off should developers show interest.1I N F L AT I O NY2345Alexandr Bormotin/Unsplashimaginima via Getty ImagesSeanShot via iStockRyanDeanMo
208、rrison via iStockRichard Newstead via Getty ImagesR A C O N T E U R.N E T7Commercial featureecent years have seen a marked change in demand for private market investing,not least due to the impact of market volatility and geo-political unrest on short-term investment returns.A series of reports from
209、 various management consultancy firms have fore-cast a shift of some$4 to$6tn into private markets between now and 2025.However,despite pent-up demand from the high net worth individual(HNWI)and small investor space for long-term invest-ment opportunities such as private equity QWhy is manager selec
210、tion critical to the success of the investor when it comes to private equity?ABManager selection is a multifaceted thing.Historical track records are important.Investors should be looking for a strategy that has a sustainable com-petitive advantage.Hopefully you will be in areas and sectors that hav
211、e secular long-term tail winds that are less corre-lated to the macro,GDP etc.This can include technology,healthcare these are important structural trends that will not change,even if we are faced with more turbulent times.Being in the right space is really important.Next,investors should be asking
212、about the managers sustainable competitive advantage.By that,we mean that they are able to add more than just capital;capital Taking the long view in investment managementTo respond to volatility,investors are turning to private markets and long-term strategies(PE),there were several barriers in the
213、 way of this sector being able to successfully access private markets.Volatility and the current geopolitical landscape are influencing small institu-tions and their ability to make investment decisions.Volatility means companies are distracted by the ups and downs of the markets,and they may lack t
214、he time and capacity to think more strategically about investing for the long term.Coupled with that,the decline in valu-ation of some publicly listed companies is creating the denominator effect,in which investors can become overexposed to private markets.This restricts the abil-ity to commit furth
215、er capital,according to Titanbays head of investments,Alex Bozoglou,making the need to manage exposure more important.Beyond the denominator effect,volatil-ity has also seen a rise in rapid fundrais-ing.This crowded market makes it harder for institutions to make decisions about funding.Bozoglou say
216、s:“This might include needing to cut managers to reduce their exposure,or to engage in secondary trans-actions,selling old commitments in order to be able to react.”Solving the challenges imposed by vol-atility requires a need for portfolio diver-sification and a reliance on assets that are less cyc
217、lical in nature,he adds.“Private equity is a long-term asset class and thats an advantage,because it takes away that short termism.Smaller investors should increasingly be taking a long-term view and ensuring a sustained and,if possible,grow-ing allocation to private markets year after year,”Bozoglo
218、u says.Creating a portfolio that is diversified,and takes a strategic,long-term view can enable companies to look beyond specific geographies or sectors.By answering ques-tions around value,growth potential and possible returns,portfolio construction takes a longer view and is less susceptible to ma
219、rket volatility.A long-term investment strategy should be planned carefully in order to avoid risk.“In volatile markets,you absolutely need to have those diversified portfolios to ensure that you can ride out the storms that come from time to time,”says Adam Harrison,chief commercial officer at Tita
220、nbay.He says illiquidity is one of the aspects of private market investing that can help investors think and plan for the long term.“Long-term planning is a factual neces-sity of private market investing and allows the private market components of the portfolio to be able to outlast short-and medium
221、-term storms that happen in the market,”Harrison says.Harrison says:“Our view is that private equity will continue to perform extremely Titanbays Alex Bozoglou,head of investments,and Adam Harrison,chief commercial officer,discuss why ensuring that smaller investors are able to access private market
222、 investments has never been so important well,because PE is nimble,agile and can effect change.But we believe that there is a cohort of general partners(GPs),of man-agers,that can do much better than that and do it more consistently.So,it is our job to really understand the strategies,under-stand th
223、e teams,how well theyre suited,how experienced they are in executing strategies and to also understand the port-folio to make sure the portfolio maps and matches what is said about the strategy.Thats very,very important.”Because of the current level of volatility in the marketplace,the long-term str
224、ategic approach is becoming more accessible to small investors,particularly HNWIs,sin-gle-company pension funds,family offices,charities,endowments and the like.The appetite is there to mirror the investment strategies and returns of the larger institutional investment funds.For more information ple
225、ase visit is abundant.What we look for are those managers who can actually effect change within a portfolio,accelerate growth,consolidate fragmented markets,execute on complex transactions and add value.We look for those skills and the managers ability to do that consistently.There is also a signifi
226、cant disparity of performance between the top tier private equity GPs and the rest of their peers.Given the higher risk/returns attached to the asset class,it is critical to have access to the very best performing funds and strategies.It is also critical to be able to build a bespoke portfolio of in
227、vestment strategies that match an investors spe-cific time horizon,liabilities and invest-ment objectives,which can vary greatly whether you are a single company pen-sion fund,a family office or a charity.QWhat is the importance of robust data and analytics tools?Is that especially important in the
228、current landscape?ABOur mission is to bring institutional quality to smaller investors,both when it comes to access to those top-tier oppor-tunities,institutional-level quality access and to institutional-level quality diligence.Thats something that we do not compromise on.The way we work is the sam
229、e way that large institutional investors will work.When it comes to looking at the data,what should investors be looking for?We do not stay at the headline numbers,that is not enough.Our approach is to understand the portfolio and whats driving value.Whats really important is to make sure that the w
230、ay that value is being created adds up with the strategy;were looking for a sustainable,consistent methodology.We are looking for companies that are growing,developing and doing so in a sustainable way.When it comes to our platform,we want to enable and digitise as much as possible.Our investors who
231、 are on the portal have access to the same tools that are also avail-able for larger,institutional clients.Private markets are not as transparent as public markets and comparing performance from fund to fund and between strategies ahead of making an investment decision can be overwhelmingly complex.
232、Monitoring the performance of an indi-vidual portfolio in real time is also more dif-ficult in the absence of a share price,while monitoring cash-flow movements in a pri-vate markets portfolio is complex given the uncertainty over timing of both capital calls and distributions.For all these reasons,
233、investors need outstanding data and analyt-ics tools,and this is only reinforced in a more uncertain economic environment where a portfolio position can move quickly.QWhat makes Titanbay stand out in the current market?Why should small investors choose Titanbay?ABThis part of the market is very clea
234、rly underserved.At Titanbay,our differ-ence is in our dual approach,so leading with the high-quality GPs,the over-subscriber sit-uations,situations that large institutional investors want to be in,yet never compromis-ing on quality.The other pillar of our thinking is to create a well-constructed por
235、tfolio that goes beyond just the basics of looking at geog-raphy and sector,but one which creates something over a three-to-five-year period and is well placed to withstand shocks.We also want to educate,and we want people to think about this exciting asset class in the full-est possible way.Even in
236、 the institutional space,there is a lot of work which is costly and cumbersome,with many unnecessary manual processes.Our approach is to do this in a digitally ena-bled way and for users to reap the benefits of the technology.From subscription all the way to the back-office functions,we make the ent
237、ire process as seamless as possible.Thats something that our whole industry needs,not just at the smaller end of the market but even at the larger institutional investor level as well.A further differentiator is our relationship with Mercer.Mercer is one of the largest con-sulting groups in the worl
238、d and our partner-ship with such a large firm is really important for us.When it comes to the investment side,we have access to the market-leading analyst research that Mercer can produce,which is a very powerful resource for our platform.Mercer also has a strong ability to secure pref-erential term
239、s with funds due to its size and our relationship with Mercer allows us to make use of those favourable terms,allowing us to bring costs down.Thats really,really powerful when it comes to producing a truly efficient and cost-efficient solution for our clients and that benefit is quite unique.AHIts t
240、he combination of two things that sets Titanbay apart:our investment proposition and our platform technology.We have some of the most experienced private market investors on our investment commit-tee who have been through multiple mac-ro-economic cycles.We can offer smaller investors a selection of
241、carefully curated,best in class private market funds for each vintage year.We bring this to investors through a plat-form that removes the administrative burden,educates and informs decision making.Investors need outstanding data and analytics tools,and this is only reinforced in a more uncertain ec
242、onomic environmentQ&AQHave you seen any notable change in the levels of interest from small investors or the types of conversation you are now having with them?AHYes,this was one of the main motiva-tions behind the launch of Titanbay in 2019.My background is in asset management,servicing institution
243、s,wealth managers etc.For a number of years now,Ive seen a signif-icant increase in demand coming from that client base for private market investing.One of the drivers behind this is that the risk/return profile of private market funds is very attractive relative to traditional asset classes.Private
244、 markets do provide true diversifica-tion which has been difficult to achieve in the traditional,balanced portfolio and this has led to increased demand for alternative assets,specifically private markets that offer real differentiation.with Alex Bozoglou and Adam Harrison RPrivate equity and the sm
245、aller investor:key considerationsPortfolio construction It is essential that smaller institutions plan their portfolio construction in the same way that larger institutional investors would.It means really thinking about all the components of private market portfolio construction and understanding w
246、hat the end goal is for your portfolio.Market trends Understanding the best trends being seen in the marketplace and being selective in which ones to pick up on and utilise.Diversification This entails not just focusing on private equity but at all private market asset classes.Smaller investors need
247、 to ensure that theyre building a portfolio which has exposure to a variety of different return profiles that should perform differently depending on the prevailing market environments.In volatile markets,you absolutely need to have those diversified portfolios to ensure that you can ride out the st
248、orms that come from time to timeW E A LT H&A S S E T M A N A G E M E N T8When ethics is not the only wayWith more and more big funds shunning firms that dont meet their ESG criteria,there may be handsome returns awaiting investors unafraid to rummage in the bargain bins one might expect,the Church o
249、f England is a fastidious investor.To reflect its higher purpose,it needs an appropriately celestial strategy for the 9bn under its management.The Church declares:“We exclude from our direct investments companies involved in indiscriminate weaponry,conventional weaponry,pornography,tobacco,gambling,
250、non-military firearms,high-interest-rate lending,human embryonic cloning,the extraction of thermal coal”The list goes on.Its also a no to businesses involved in“egregious controversies”,firms that have a damaging social impact and even those considered poor at reporting.All investees must meet its s
251、trict environmen-tal,social and governance(ESG)criteria.The C of Es ethical approach may be admirable and wholly fitting for an organisa-tion of its nature,yet(squeamish readers may wish to turn the page now)it could be foolhardy from a financial standpoint.As more investment managers set high ESG b
252、ars,the stocks they shun for falling short begin to become bargains for those still pre-pared to touch them.For investors open to cigarettes,alcohol and guided missiles,there may be easy money to be made.The events of Q1 might prompt even the most pious of investors to rethink.Russias invasion of Uk
253、raine at the end of February triggered a shift in global markets.Defence stocks soared,for instance.The share price of BAE Systems,maker of the Stormer armoured vehicles that the UK has sent to Ukraine,shot up on the day that Russian troops crossed the border.So did those of Italian defence conglome
254、rate Leonardo and French giant Thales Group,maker of the Starstreak missile system that Ukraine is using to defend its airspace.And the widespread relaxation of Covid restrictions has released pent-up demand for booze and fags,as consumers flock back to pubs and bars.The share price of drinks giant
255、Diageo slumped in the early months of the pandemic,but it has since roared back to record highs,while cigarette maker Philip Morris International is having a solid year.So is there merit to an anti-ESG strategy to reap where others wont sow?As major asset managers such as BlackRock and Nor-ways 1.1t
256、n sovereign wealth fund avoid non-compliant stocks,logic suggests that stakes in profitable companies may be avail-able at a knock-down price.Theres also the question of whether archbishops and other had worse compliance records with regula-tions protecting both labour rights and the environment.Rat
257、ings agencies do reflect this uncer-tainty.Imperial Brands,maker of Gauloises cigarettes and Montecristo cigars,for instance,receives an A rating from MSCI for its work in helping farmers to diversify their income and constructing solar-powered water pumps in Malawi.And brewing giant AB InBev has wo
258、n praise from ESG fund managers for setting a target for 20%of its income to be generated by low-alcohol and alcohol-free beer by 2025.“I dont think things are as black or white as weve been led to believe,”says Dr Andrew White,senior fellow at the University of Oxfords Sad Business School.“Not all
259、oil companies are the same,for instance.At BP,they are serious about their transition away from fossil fuels.Even investing in arms can look quite different today.”St Thomas Aquinas,the mediaeval priest and philosopher,argued that war could be justified if it met certain conditions,writing:“It is ne
260、cessary sometimes for a man to act otherwise for the common good,or for the good of those with whom he is fighting.”In light of recent events,perhaps even the arch-pacifists at the Church of England might want to rethink their ESG blacklist.righteous investors are correct to exclude certain stocks.A
261、fter all,the defence of Ukraine has been hailed across the demo-cratic world as a noble cause.German defence company Rheinmetall is the maker of Leopard tanks and Marder armoured vehicles,both of which are badly needed by Ukrainian forces.In March its CEO,Armin Papperger,told the Financial Times:“So
262、me months ago,people wanted to ban us;to say that this industry is a very bad industry Its a totally different world now.”When it comes down to pure returns,its hard to find convincing evidence that sup-ports saints or sinners.The MSCI World ESG Leaders Index,which tracks the perfor-mance of ethical
263、ly compliant large and medium-sized companies,narrowly beat the traditional MSCI World Index last year.The two indices have matched each other closely over the past five years.Yet recent research by financial services firm Refinitiv Lipper indicates that ESG per-formance has been dipping.Although th
264、e ESG companies it monitors outperformed over three-and five-year periods in the top-selling sectors,their returns have trailed about 8%behind those of their non-ESG equivalents over the past 12 months.Price lurches during wars and pandemics may offer false insights.Joe Smith,invest-ment analyst at
265、Equilibrium Investment Management,argues that youd be foolish to base your allocation choices on volatile world events.“If you had looked two years ago at the case for the prices of oil and gas rising as they have done,youd have needed to foresee a terrible conflict to deliver such returns,”he says.
266、“It would have been a very speculative thing for you to have sat there and said:I think there will be this conflict that will drive up prices.”In Smiths view,its better to focus less on black-swan events,no matter how seismic,and take a longer-term view.The theory is that ESG stocks should prevail e
267、ventually.“Consider tobacco,for instance,”he says.“Sales are declining in the younger popula-tions.And in older populations it is known to be harmful.Its a product that kills its cus-tomers.There will come a point when the customer base wont be there anymore.”But the reliability of some processes by
268、 which firms are classed as ESG stocks has been called into question.Researchers at Columbia University and London School of Economics compared the records of US com-panies in 147 ESG fund portfolios with those of firms in 2,428 non-ESG portfolios.They discovered that the former group generally Char
269、les Orton-Jones I dont think things are as black or white as weve been led to believeS I N S T O C K SARaconteurs new campaign product suite gives marketers the best of both worlds.Email to plan your campaign now.Want the power of print media combined with best in class lead generation?Slobodan Milj
270、evic via iStock5%22.3%8%The annual outperformance of the largest 50 sin stocks compared to MSCI WorldAverage underpricing of sin-firm IPOs compared with non-sin-firm IPOs,suggesting sin stocks can be bought at a bargainThe potential tracking error when all sin stocks are excluded and investors inves
271、t only in sustainable themes(an optimal tracking error is 0%relative to its benchmark)UBS Global Research,2019The Journal of Investing,2020Blitz and Swinkels,2021R A C O N T E U R.N E T9The long goodbye:finance firms tackle the difficult issue of cognitive declineor wealth manager Austyn Smith,boost
272、ing support for clients with dementia has been a personal mis-sion.After his father was diagnosed with Alzheimers,Smith realised community support for people suffering from cognitive decline was limited,and that wealth man-agers have a unique opportunity to help.Smith implemented a robust client vul
273、-nerability policy in his UK-based company Austyn Smith Associates.This includes training staff to watch for and document signs of cognitive impairment in clients;insisting clients aged over 75 assign power of attorney(POA),and asking for permission to talk to clients children or other trusted indiv
274、iduals.Smith has also adopted the nine principles of the new Financial Vul-nerability Taskforce(FVT)Charter,which form a commitment to safeguarding at-risk clients,including those with dementia.He says his fathers situation would ide-ally have been dealt with much sooner.“But we didnt have that leve
275、l of under-standing about dementia,”he says.“Finan-cial advisers are in a unique position to spot and act on dementia early on because of the deep conversations we have about finances and planning.“We are not here to interfere with fami-lies,but our new processes mean we can be in the front line of
276、protecting our clients and share what we have learnt with them.”Cognitive decline is one of the biggest risks facing clients across the finance industry.Yet many wealth managers,large and small,are ill-prepared to help those affected.According to 2020 data from Alzheimers Disease International,the g
277、lobal number of people with dementia will almost double every 20 years,to 78 million in 2030 and 139 million in 2050.Dementia can impair judgement and expose sufferers to financial risks such as fraud,as well as leading to lost accounts and poor deci-sion-making.Many more people suffer mild cognitiv
278、e impairment as they age,which can also leave them vulnerable.Across the wealth management industry,companies are responding by developing ways to spot cognitive decline in clients and help them.But it is a sensitive and controver-sial area.Tackling cognitive issues is particularly challeng-ing for
279、do-it-yourself investment platforms as they dont have face-to-face interactions with clients.Some large US platforms,such as Vanguard,Fidelity Invest-ments and Charles Schwab,are attempting to address this with sophisticated technology that moni-tors for signs of decline,including diffi-culty naviga
280、ting security screens or resetting passwords frequently.In such cases,they might inform a family member.Vanguard also checks client calls for words such as“confused”and“dementia”,which might indicate a problem.Technology provider Comentis has deve-loped a cognitive assessment engine to help financia
281、l firms spot reduced mental capaci-ty.It says it aims to bring objectivity and consistency to cognitive assessment,with a clinical validity the industry has so far lacked.The firm has already partnered with major wealth managers such asSt.Jamess Place;adviser network Tenet;and back-office technology
282、 provider Intelliflo.Comentis recognises that using technol-ogy to assess mental capacity is a sensitive topic.Though it has psychometric ques-tions that aim to give advisers a deeper understanding of cognitive capacity,clients are not necessarily aware they are being assessed for it.This can make s
283、ome advis-ers hesitant to use the technology.To address this,Comentis also provides a framework for handling client questions.Smith says the UK financial regulators recent guidance on safeguarding vulnera-ble customers which it plans to beef up with further proposals soon helps make such assessments
284、 less awkward because advisers can tell clients that it is just a regu-latory requirement.He says none of his clients has been upset by his new policies.“The only problem you sometimes get is an 80-year-old who is as sharp as a pin,saying,Dont tell my chil-dren what I have,”says Smith.“Thats fine as
285、 long as they remain sharp and you docu-ment the conversations.”Robin Melley,managing director at UK-based Matrix Capital and member of the FVT steering group,says some wealth man-agers have made progress in handling cog-nitive impairment.But there is still much more to do,and they need to embed pro
286、tec-tion for vulnerable clients in daily business As close confidants of ageing wealth holders,investment managers are in a prime position to spot early signs of neurological deterioration and processes rather than ticking a regula-tory box.“Technology plays a part and will develop.But there is an i
287、ncreased need for training in how to deal with vulnerable customers,”says Melley.“Those skills are difficult to replicate with technology,so intervention from a suitably trained adviser is necessary.”In the UK,Melley recommends training from the Society of Later Life Advisers,some of which is free a
288、nd available to non-members,and from the Society of Trust and Estate Practitioners.Wealth managers can also use the FVTs resource library.Firms could also train staff to be Dementia Friends,an initiative by the Alzheimers Society that investment plat-form Hargreaves Lansdown has adopted.Beyond train
289、ing,concrete steps to address cognitive decline can include con-solidating assets to reduce complexity,pre-funding care costs,discussing financial matters with trusted individuals and plan-ning when to hand over control of finances,which is the hardest choice for many.Melley says a common misconcept
290、ion is that people with cognitive impairment can simply rely on next-of-kin to step in.How-ever,in the UK at least,a next-of-kin cannot lawfully act on a clients behalf unless they have a POA.“Informal arrangements are fraught with difficulty and they increase the risk of financial abuse,”says Melle
291、y.“Finance pro-fessionals need systems and processes to ensure they are dealing with someone who has lawful authority.”In addition to its technological processes,Fidelity has trained all customer teams to recognise signs of cognitive decline and escalate concerns.It also has a team dedi-cated to pre
292、venting and addressing abuse of elderly customers.Fidelity provides guides and events to help customers and their families confront potential cognitive impairment as they age;and tackle difficult conversations around ageing.It also signposts to third parties such as estate planning,legal support and
293、 care coordination.Meredith Stoddard,vice president of life events planning at Fidelity,says:“The key is for families to use the systematic controls,like trusted contact,POA and health care proxies,plus educational resources well before they need them.Fidelity has invested a lot in these systems,but
294、 the industry can-not take the place of a caring family mem-ber,friend or neighbour.”Vanguard,2021Tim CooperCommercial featurenvesting in individual real-world assets such as commercial real estate or renewable energy infrastructure has traditionally been the domain of only the biggest investors.Now
295、,with the emergence of fractional investing and blockchain-based tokeni-sation,eligible retail investors in the UK,US and Switzerland can finally invest more easily in real assets that have the potential to provide steady income and generate the type of long-term returns that have historically only
296、been availa-ble to institutional investors.“Day trading apps like Robinhood have shown how public markets can be thrown wide open to individual investors through the use of technol-ogy,”said Rob Lamb,co-founder of Hedgehog,an app that enables indi-viduals to buy fractional investments in real-world
297、assets via digital tokens on blockchain networks.“If you combine fractional invest-ing as a concept and tokenisation as a concept,then really the worlds your oyster in terms of enabling access to investments,”said Lamb.“The differ-ence between an institutional investor and an individual investor can
298、 start to erode in a positive way.”Hedgehog was co-founded by Lamb and Michael Ward,who bring with them vast experience across the financial services industry.Lamb spent a decade working at private markets invest-ment firm Partners Group,which has invested more than$170bn in private markets,while Wa
299、rd started his career at Goldman Sachs.They lead a team that have worked on fintech startups including Robinhood,Revolut,Monzo and Wise.The company partners with asset owners who are prepared to sell a minority stake in their assets,which Hedgehog holds in its funds and then tokenises to enable frac
300、tional investments in the asset in question.Hedgehog is currently structuring investment opportunities in around$1.5 billion of real assets that would otherwise be unobtainable for individ-ual investors.“The traditional barriers to entry for individual investors are real,”said Lamb.“Our app unlocks
301、investments not only in assets like commercial real estate and renewable energy infrastructure,but also potentially in under-funded areas of real assets like social housing or assets that have community value to a unique group of connected people,such as a football stadium.The opportu-nities availab
302、le are broad,but our focus at Hedgehog is on those tangible assets that play a key role in peoples lives.”Thematic investment strategiesTwo of Hedgehogs most recent invest-ment offerings include access to one of the largest rooftop solar arrays in New York State and an industrial ware-house hub on t
303、he outskirts of New York City that facilitates manufacturing and distribution in close proximity to the city centre.“If you believe in the on-demand cul-ture of society today,then the need for well-purposed,modern distribu-tion facilities and warehouses like this will go up,not down,”said Ward.“And
304、if you believe that residential and com-mercial tenants would prefer to use green energy rather than rely only on the grid for electricity,then it follows that landlords will need to provide them with access to affordable renew-able energy.The thematic connection for our investments is important.”Fr
305、actional investments in these assets start at$5,000,with the dura-tion of the investments also varying.For example,the industrial warehouse has a minimum investment of$10,000,with an estimated total return of 20%to 25%over four years.For the solar array,it is a 10-year commitment,which Hedgehog esti
306、mates will yield a low single digit percentage annual income over that period for a minimum investment of$5,000.“The solar array will appeal to inves-tors that want to earn stable income over the long term and support the transition to a low-carbon economy at the same time,”said Ward.In addition to
307、its industrial and logis-tics and renewable energy infrastruc-ture assets,other Hedgehog investment themes include film and TV studios,residential housing,affordable housing and mixed-use properties involving bio-medical and life sciences companies.For instance,one asset in the works is a$100 millio
308、n film studio at the iPark Hudson complex in Yonkers,which will be anchored by Lionsgateproducers of movies such as The Hunger Games and John Wick.Hedgehog recog-nises that consumer appetite for 24/7 streaming creates pressure to deliver more content and increasing demand for studios where content c
309、an be pro-duced.Studios and streaming giants need more space than is currently available,which supports long leases and high rents.A new way to investIn the past,individuals who wanted to gain exposure to real assets such as commercial property either had to invest in something like a real estate in
310、vestment trust(REIT)or through a private fund,which often required writing much larger cheques to access than a$5,000 minimum investment on the Hedgehog app.“If you invest in a fund as an alter-native to investing via Hedgehog,you would either have to do that through a public REIT and therefore be a
311、t the mercy of the stock market,or via a pri-vate fund,in which cases your minimum investment would be much higher,”said Lamb.“In addition,most off-the-shelf funds are structured as a blind pool so you have to decide up front with limited visibility that your money will deliver the outcomes you are
312、trying to achieve financial,environmental,social or whatever they might be.”Instead,Hedgehog can allow individ-uals to align their investment choices with their personal preferences and values,at a much lower cost and away from the volatility of the stock market.“We are appealing to the individual i
313、nvestor who wants to see what theyre buying and wants to pick and choose and build their portfolio themselves,”Ward said.“Thats only possible by securing the assets upfront,which is not easy to do but is what makes Hedgehog unique and enables us to offer this product.”While blockchain technology is
314、the key to unlocking fractional ownership of these assets,Lamb says the tech itself is not the differentiatorit is the market thats opened up as a result of the underlying tech.“For us blockchain technology is the enabler of the benefits that we think are most attractive to potential investors in th
315、ese assets,”said Lamb.“One of the major challenges with real assets is illiquidity,so by tokenising the investments we offer,we take the first step towards making liquidity possible in an illiquid asset class.”In theory,those digital tokens could in the future be bought and sold on an open exchange
316、with everything recorded on blockchain,“in the time it takes you to buy a cup of coffee,”Lamb said.“Thats what the technology can offer and thats what were committed to building in our product.That in a nut-shell is why were a blockchain busi-ness,to make more of the benefits of investing in real-wo
317、rld assets available to more people in a way that is efficient and scalable,”Lamb said.To discover investments in real-world assets visit hedgehog-How tokenisation is unlocking real-world assets for retail investorsA new blockchain-powered app enables fractional investing in income-generating assets
318、,such as commercial real estate,of a size and quality that would otherwise be considered out of reachI Hedgehog can allow individuals to align their investment choices with their personal preferences and values,at a much lower cost and away from the volatility of the stock marketCapital at risk.Hedg
319、ehog Invest Limited(FRN 961050)is an Appointed Representative of MJ Hudson Advisors Limited(FRM 692447)which is authorised and regulated by the Financial Conduct Authority of the United Kingdom.C L I E N T S E R V I C EF Technology plays a part and will develop.But there is an increased need for tra
320、ining in how to deal with vulnerable customers80%of caregivers for those with dementia report some level of financial mismanagement by the individual they care forof investors transfer control of their finances immediately at the onset of cognitive decline8%RBC Wealth Management,2019fizkes via iStoc
321、kW E A LT H&A S S E T M A N A G E M E N T10Crumbie agrees that the investment approach to addressing human rights risks requires a highly nuanced approach.“Engagement can be successful,but often it is not.Continued investment does provide legitimacy.Its therefore better to cut ties when theres no si
322、gn of improvement,”he says.“But this can have unintended ramifica-tions for parties other than the regime,so such decisions must be carefully considered.”Some investors note that divestment can be detrimental to countries where many citizens are facing poverty.Moreover,in highly liquid markets,where
323、 a single investor is unlikely to hold a significant stake in a company of con-cern,divestment can have a limited impact while also potentially damaging returns.A solution could be to form a multi-stake-holder coalition in which asset owners and investors jointly challenge corporate behav-iour that
324、concerns them.There is little doubt that awareness of human rights risk is growing in the investment community,but whether its members can cooperate to drive lasting change remains to be seen.As Esguevillas says:“The S in ESG is often described as tricky to define and act on.That doesnt mean it shou
325、ldnt be attempted.”Investors versus oppression:time for a regime change?While environmentally focused investing has drawn much attention,human rights campaigners believe that the investment community should pay as much heed to the social component of ESGment of supply chain risk assessment in their
326、ESG models,but human rights is a contested space.There are few examples of objective rights and wrongs beyond certain core areas,”Crossman notes.“People will draw their own ethical lines,which is why its important to have a range of products in the market with different emphases from a social point
327、of view.”Consider Egypt,for instance.Foreign investment has poured into firms operating there in recent years.But over that time Pres-pose-led investors is forcing companies to take notice.A survey of new investors in the UK by Triodos Bank found that 90%want their fund managers to conduct in-depth
328、research to ensure that all investments align with their personal ESG criteria.But a key challenge is to decide what con-stitutes social injustice.Determining which territories to avoid often proves difficult,says Matt Crossman,stewardship director at investment management group Rath-bones.“Investor
329、s should have some ele-he trend towards environmental,social and governance(ESG)invest-ing has gathered momentum in recent years,as investors recognise the importance of its long-term value.Even amid the Covid crisis,the value of assets in sus-tainable funds worldwide hit a record 3.1tn in 2021,acco
330、rding to Morningstar.But while fund managers have focused on the environ-mental aspect of ESG,they havent shown the same interest in the social element.Carlota Esguevillas is a responsible invest-ment analyst at fund manager EdenTree.She reports that“while investors have flocked to act on climate ch
331、ange,issues like human rights have received less attention”.In their search for lucrative new opportu-nities,investors are looking further afield.Some potential investees are in countries where human rights abuses are common.“Our concern about oppressive regimes is intrinsically linked to human righ
332、ts,”Esguevillas says.“Identifying these coun-tries helps us decide how exposed a company may be to potential human rights abuses and how complicit it may be.”Numerous corporations have come under fire in recent years for their links to regimes with poor human rights records.In 2017,for instance,Amne
333、sty International urged Nigeria,the UK and the Netherlands to investigate Shell in light of the Nigerian mil-itarys brutal crackdown during the 1990s on people protesting at the Anglo-Dutch firms activities in the oil-rich region of Ogoniland.According to campaign group Ethical Consumer,many companies benefit from the very conditions that contribute to oppression,including weak labour protec-tion