DUBLIN

OCTOBER 6–7, 2016

Mercer Global Investment Forums – Dublin, 6–7 October, 2016

Forum Agenda

Contains links to related content on Mercer.com

WEDNESDAY, 5 OCTOBER

14:30–15:00Registration and Refreshments

15:00–17:30Asset Manager Session

18:00–20:30Welcome Buffet Reception for all Attendees

THURSDAY, 6 OCTOBER

07:45–08:45Breakfast

08:45–08:55Welcome and Opening

Brian GriffinInvestments Business Leader — Ireland

08:55–09:00MC Day One

Caitriona MacGuinnessSenior Investment Consultant

09:00–09:45Investment Themes

The current economic and market environment presents investors with many sources of uncertainty — from the financial, social and economic impacts of Brexit to continued geopolitical risk and ongoing concerns about China. While risk management will remain high on the agenda, investors should also prepare for the opportunities that might arise from periods of market stress. In this session, we explore our key strategic research themes: tilting portfolios from beta to alpha, handling reduced liquidity in "liquid" markets, preparing for a maturing credit cycle and thinking long term. We discuss how these themes translate into practical investment opportunities for our clients across Europe.

Deb ClarkeGlobal Head of Investment Research

Panelists

Paul KennySenior Investment Consultant

Wayne DavidsonSenior Investment Consultant

Annabell MathiesenInvestments Business Leader — Nordics and Eastern Europe

09:45–10:15Escaping the Short-horizon Mindset

Long-term investing is a philosophy many investors aspire to, but how many really adopt a long-term focus in practice? This session provides clarity about what it means to invest for the long term, addressing topics such as:

  • How long is "long term"?
  • What factors should we take into account when investing for the long term?
  • What practical steps can long-term investors take in their portfolios?

In particular, the session focuses on how investors might adopt a broader perspective on risk in order to address some of the difficult-to-measure risks and secular trends ignored by traditional risk models.

Phil EdwardsDirector of Strategic Research — Europe

Aled JonesSenior Investment Consultant, Responsible Investment

10:15–10:45Networking and Coffee Break

10:45–11:45Keynote Address: Global Political Risk Outlook — Trends and Hotspots

Willis Sparks, Global Macro Director at Eurasia Group, details the geopolitical risk factors changing lives and moving markets in Europe and around the world. Upcoming elections in Europe and the United States, a new generation of turmoil in the Middle East, new factors in oil markets, Brexit bargaining, risks emanating from Turkey and Russia, and high-stakes changes underway in China will all have their impact on the global economy in coming years. Mr. Sparks looks beyond the headlines and unpacks the details on where these stories might be headed.

Willis SparksDirector of Global Macro, Eurasia Group and U.S. Electoral Politics/Geopolitical Risk Management Expert

The World Economic Forum's Global Risks Report 2016 identified environmental risks — such as water crises, climate change and extreme weather events — as those of greatest concern to business leaders, based on a 10-year time horizon. Mercer's Investing in a Time of Climate Change report also addressed these concerns. In this lightning talk, we highlight how investors are increasingly exposed to environmental risks, the latest developments in assessing these risks, and the options to reduce risk and invest in quality opportunities targeting environmental themes across asset classes.

Jillian ReidSenior Investment Consultant, Responsible Investment

11:55–12:25In Praise of Patience: Long-horizon Equity Investing

How can investors take advantage of their long-term perspective and put together a well-constructed long-horizon equity portfolio? In this session, we showcase examples of managers who genuinely invest for the long term, explore why such an approach is beneficial and discuss how investors can monitor these managers in practical terms.

Rich DellGlobal Head, Equity Boutique

Nick SykesDirector, Manager Research

12:25–13:40Lunch

13:40–14:05Giving Credit Where It's Due

Investment portfolios have undergone a makeover in the last decade or so with credit (or non-government bonds) increasingly becoming a mainstay alongside traditional equity and government bond holdings. Well-diversified portfolios are now the accepted norm, but we believe that one area for further consideration is the wider role credit can play in portfolios — in particular, for DB schemes. In this session, we explore the wide spectrum of credit assets available and how they might form part of investment strategies for defined benefit schemes, based on their differing financial objectives.

Sathish RamdayalSenior Financial Strategy Consultant

David O'SullivanHead of Investment Strategy, Delegated Solutions

14:05–14:40Managing Risk: Insights From Our Industry Peers — a Panel Discussion

In this panel session, we discuss how our clients balance short-term challenges with long-term investment opportunities. What are the hurdles, how are our clients managing short- and long-term risks within their investment portfolios, and what strategies are they employing to ensure they maintain the appropriate long-term focus?

Moderator

Rosalind BriggsClient Relationship Leader — Ireland

Panelists

Charles CoaseIndependent Pension Scheme Trustee and non-Executive Director

John ChilmanGroup Pensions Director, FirstGroup plc

Jan Erik SaugestadExecutive Vice President, Storebrand ASA; CEO and CIO, Storebrand Asset Management

14:40–15:10Networking and Coffee Break

Flooded by Capital, Deserted by Yield: How Should Insurers and Their Asset Managers React?

2016 has been a challenging year for insurers, with the introduction of Solvency II, heightened market volatility, continued glut of capital and stakeholder scrutiny. In this breakout session, we discuss the unexploited commercial opportunities and investment implications that these industry trends present. Additionally, as the search for yield continues, we investigate the mythical status of illiquid asset classes as a silver bullet to enhance returns. We discuss the methods used by insurers to measure and manage their illiquidity budget, how this can be integrated into their risk appetite and strategic asset allocation, and how behaviour in this investor segment impacts other investors.

Michael ButlerSenior Financial Strategy Consultant

Ravi RastogiInsurance Group Leader — Europe

Are Your Investments Protected Against Cyber Security Threats?

Cyber risk is an escalating threat and one of the most challenging issues facing the financial world today. Cyber risk mitigation isn't just a challenge for the IT department: it requires engagement by everyone and must be on the radar of executive leadership. Effectively managing cyber risk today requires a comprehensive multi-dimensional approach that encompasses people, processes and vendors — and includes response and recovery plans in addition to prevention tactics. In this breakout session, we discuss why we should all be taking this more seriously and what steps we can take to mitigate cyber security threats.

Mitchee ChungEuropean Director, Mercer Sentinel® Group

Dave WillersSenior Investment Consultant

Are Master Trusts the Future of DC?

Defined contribution plans have seen rapidly increasing regulation, governance requirements, investment complexity and associated costs over recent years. Although relatively new to the Irish market, master trusts have been employed by UK DC plans for a number of years. In this breakout session, we identify the forces for change from a UK and Irish perspective and discuss whether master trusts provide a solution to these challenges. We consider the pros and cons of the master trust approach and lessons learned from other markets in order to answer the question: "Are master trusts the future of DC?"

Nora O'ConnellSenior Investment Consultant

Philip ParkinsonMercer Workplace Savings Investment Product Leader

The concept of diversity as a tool to improve the quality of decision-making is nothing new, but are we actually doing anything about it? In this session, we look at different types of diversity and explore how we are using these in our manager research for our assessment of managers. We take one particular aspect — gender diversity — and discuss where the asset management industry is today in terms of women and what actions we can all take now to make a difference.

Michael KinneySenior Research Specialist, Equity Boutique

Julia HobartPartner, Oliver Wyman

"Yields are at historical lows", or so we all have thought on a number of occasions in recent years. In 2016, we saw the German 10-year sovereign bond yield turn negative for the first time ever. This low (or no) yield environment is unprecedented territory for pension schemes. This session reopens the theory of Liability Driven Investment (LDI) and why now more than ever defined benefit pension schemes should consider the merits of hedging their liabilities against interest rates and inflation.

The session explores why the concept of LDI has been slow to materialize in a European context, yet has become a common feature among UK pension schemes. We discuss learnings from the UK's experience and the practical challenges to overcome.

Sheena FrostInvestment Strategist, Delegated Solutions

Daniel CunningtonLiability Hedging Specialist, Delegated Solutions

Are Your Investments Protected Against Cyber Security Threats?

Cyber risk is an escalating threat and one of the most challenging issues facing the financial world today. Cyber risk mitigation isn't just a challenge for the IT department: it requires engagement by everyone and must be on the radar of executive leadership. Effectively managing cyber risk today requires a comprehensive multi-dimensional approach that encompasses people, processes and vendors — and includes response and recovery plans in addition to prevention tactics. In this breakout session, we discuss why we should all be taking this more seriously and what steps we can take to mitigate cyber security threats.

Mitchee ChungEuropean Director, Mercer Sentinel® Group

Dave WillersSenior Investment Consultant

Are Master Trusts the Future of DC?

Defined contribution plans have seen rapidly increasing regulation, governance requirements, investment complexity and associated costs over recent years. Although relatively new to the Irish market, master trusts have been employed by UK DC plans for a number of years. In this breakout session, we identify the forces for change from a UK and Irish perspective and discuss whether master trusts provide a solution to these challenges. We consider the pros and cons of the master trust approach and lessons learned from other markets in order to answer the question: "Are master trusts the future of DC?"

Nora O'ConnellSenior Investment Consultant

Philip ParkinsonMercer Workplace Savings Investment Product Leader

The concept of diversity as a tool to improve the quality of decision-making is nothing new, but are we actually doing anything about it? In this session, we look at different types of diversity and explore how we are using these in our manager research for our assessment of managers. We take one particular aspect — gender diversity — and discuss where the asset management industry is today in terms of women and what actions we can all take now to make a difference.

Michael KinneySenior Research Specialist, Equity Boutique

Julia HobartPartner, Oliver Wyman

Is it now time to buy emerging market equities, or is this actually the time to sell? Should we be worrying about inflation, or is it deflation we should concern ourselves with? And finally, is globalisation good or bad for us? In this session, we debate these three topical investment issues, and you decide whether you are a bull or a bear.

Andrew KirtonInvestments Business Leader — EuroPac

Rupert WatsonHead of Asset Allocation, Delegated Solutions

17:30–17:40Closing Remarks

Robert HaydenBusiness Leader, Delegated Solutions — Ireland

18:30–22:00Cocktails and Offsite Dinner

FRIDAY, 7 OCTOBER

08:00–09:00Breakfast

09:00–09:05MC Day Two

Sinead TwohigSenior Investment Consultant

09:05–10:05Guest Speaker: the Promise and Threat of Technology

What does the long term look like with digital transformation gathering pace? The 21st century will see a world increasingly mediated by machines and moulded by AI and big data. But its story will also be one of billions more people across the world gaining access to new levels of opportunity and interconnection. What are the skills we will most need — and where will value lie — in this era of autonomous tools, evolving algorithms and ceaselessly connected lives? This session explores what it means to shift mindsets ahead of time, and to meet the digital future prepared.

Tom ChatfieldBroadcaster, Technology Theorist, and Author of How to Thrive in the Digital Age

10:05–10:35The DC Landscape: Developments in Member Engagement

Opportunities now exist, courtesy of the digital revolution and developments in behavioural economics, to make member decision-making in DC schemes simpler and more intuitive. In this session, we set out how to structure a DC scheme in such a way that natural human biases lead towards better, rather than worse, outcomes.

Danny ManserghHead of Member Communications — Ireland

Grainne NewmanSenior Investment Consultant

10:35–10:45Lightning Talk: Distressed Debt — an Emerging Opportunity

Liquidity in credit markets has reduced significantly and an increasing proportion of the high-yield market is now technically in "distress". Does this mean an opportunity is emerging to invest in distressed debt? In this lightning talk, we explore what distressed debt is and discuss whether defined benefit and other large institutional investors should consider the merits of this investment opportunity.

Mary DillonAssistant Portfolio Manager, Delegated Solutions

10:45–11:15Networking and Coffee Break

When searching for diversification from traditional assets, multi-asset strategies are sometimes viewed as a simpler and cheaper alternative to hedge funds. Is this a reasonable assumption and is the comparison fair? In this session, we explore the key attributes of both strategy types and provide views on how investors should decide which to invest in.

Sinead TwohigSenior Investment Consultant

Divyesh HindochaSenior Investment Consultant

Kishen GanatraResearch Specialist, Hedge Fund Boutique

You want to diversify your portfolio and provide additional returns above mainstream assets, so you are considering making an allocation to private markets. But which asset class should you invest in? In this session, four of our specialists are pitted against each other to persuade you to select their asset class of choice. Which will you get your vote as the most compelling in the current environment?

Facilitator

Michael CurtinSenior Investment Consultant

Presenters

Matthew AbbottSenior Research Specialist, Real Estate Boutique

Dr. Andreas MaierPrivate Equity Specialist, Mercer Private Markets

Deborah WardleAssistant Portfolio Manager, Delegated Solutions

Amarik UbhiInfrastructure Research Specialist, Mercer Private Markets

12:10–12:30Smarter Portfolios — Giving Yourself More Time in a Short-term World

In this session, we draw together the major themes and topics highlighted over the course of the Forum. We put forward suggestions for how investors should act both to manage the short term — by capitalising on opportunities and responding to changing risk environments — and to achieve long-term goals — by positioning the portfolio accordingly to address perceived long-term themes, risks and opportunities.

Niall O'SullivanDeputy Chief Investment Officer, Delegated Solutions

12:30–12:40Concluding Remarks

Martine FerlandPresident — EuroPac Region

12:45–14:00Lunch

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