CFA Society Toronto Event Programming
During my time on the Industry Relations & Corporate Governance Committee and Risk Management & Alternative Investments Committee, over 30 events were held on a range of topics to enhance the discourse in Toronto’s financial community and bring important issues into sharper focus. Below is a sample of what we've accomplished so far.
COVID’s Impact on Commercial Real Estate: The Future of Office and Retail
Seminar - March 2021
Overview
Commercial real estate has been severely impacted by COVID-19 and the two sectors that have been hardest hit are office and retail. Working from home has gained widespread acceptance in the workforce. The shift to e-commerce has accelerated with an even greater number of consumers making on-line purchases. Over one year into the pandemic, many maintain that COVID-19 will hasten the decline of these two sectors. Others argue that the current difficulties are merely temporary, and the need for physical office and retail space has endured a variety of market disruptions and ultimately stood the test of time. Office and retail’s average combined weighting of nearly 70% in Canadian institutional real estate portfolios should give investors good reason to examine how these sectors will fare going forward.
Learning Outcomes
– Understand the current landscape of commercial real estate approximately one year after the first confirmed case of COVID-19 in Canada.
– Learn the mid-term and long-term strategies under consideration to adapt to trends and changing behaviours that have been accelerated by the pandemic.
– Understand the future prospects of office and retail property from an investment perspective.
Representation
Avison Young, Alberta Investment Management Corporation, TD Asset Management, Oxford Properties Group
AI and Corporate Governance
Seminar - January 2021
Overview
The adoption of AI is accelerating rapidly across almost all sectors of our economy. A survey by Gartner showed that 37% of organizations had already implemented AI in some form, and the number of organizations implementing AI has tripled in the past year. This growth presents several risks and opportunities for investors.
Corporate Directors now need to be concerned about the scope and risks of AI applications, and how the data is stored and used. User manipulation, invasion of privacy and social segmentation could result in regulatory, counterparty, cybersecurity, and operational risks, both for investors and corporate directors.
Learning Outcomes
– How data and AI should be regulated.
– The different regulatory frameworks and how they are evolving.
– Specific risks introduced by a firm’s AI and data governance practices.
– How corporate directors can manage these risks and stay current.
– How investors can evaluate the corporate governance of potential investments considering the emerging risks and regulatory regimes.
Representation
Judi.ai, Norton Rose Fullbright Canada LLP, Federated Hermes, PwC Canada
The Art and Science of Forecasting
Seminar - September 2018
Overview
Forecasting has always been a crucial task for those charged with formulating predictions of trends, economics conditions, or valuations of shares, assets, liabilities, or an interest in a business in their charge. As predicting the future based on knowledge of today’s circumstances is regarded as an impossible task, what steps can be taken to improve the accuracy and validity of a forecast?
Learning Outcomes
– The incorporation of risk when preparing economic/financial analyses.
– Due diligence concerns specific to forecasts when generating assessments of value.
– Audit issues when with respect to forecasts.
– Professional responsibilities concerning reliance when transferring reporting to third parties.
– Current industry perspectives on forecasting.
Representation
Portfolio Management Corporation , Veritas Investment Research, The Brattle Group, BDO Canada
New and Emerging Liquidity Sources for Mature Private Equity Portfolios
Seminar - September 2017
Overview
The Private Equity fundraising surge that occurred from 2005 to 2007 prior to the Great Financial Crisis produced a surplus of mature PE funds/holdings yet to return cash to LPs for capital redeployment. Liquidity alternatives, in addition to the traditional secondary sale of LP interests, have emerged to meet this multi-billion surplus. The seminar will provide an overview of three sources of liquidity (secondary sale of LP units, GP restructurings, and portfolio financing options) with a focus on the development of new financing and liquidity solutions. Emphasis will be placed on how liquidity sources will evolve over the next two to five years in response to the volume of maturing PE funds that will require financing and structuring solutions as they approach or exceed the end of their expected life spans.
Learning Outcomes
– Why a large overhang of mature private equity funds/holdings exists.
– Why LPs are seeking fresh liquidity solutions given their private equity asset ownership.
– The legal and economic structure of new liquidity solutions.
– How the emerging liquidity solutions could be applied to other private assets across institutional portfolios.
– Assessing the risk of undertaking private equity liquidity solutions for both the assets involved as well as across the overall portfolio.
Representation
Whitehorse Liquidity Partners, Crestline Investors, Unigestion, Colleges of Applied Arts and Technology Pension Plan (CAAT)
Private Equity Portfolio Management: Opportunities, Trends and Obstacles
Seminar - March 2016
Overview
Private equity has increasingly been added to investment portfolios as investors and pension plans look for alternative sources of return to diversify their holdings and tap into the benefits of illiquidity. Where are senior investors in private equity seeking new opportunities, and how are they managing risks in the less liquid area of the equity investment universe?
Learning Outcomes
– How private equity practitioners are viewing the current investment landscape.
– Differences between Canadian, American and European viewpoints.
– The role of primary, secondary and co-investments in terms of portfolio construction optimization.
– Realistic goals and objectives for client PE portfolios.
Representation
Caledon Capital Management, New York State Common Retirement Fund, Unigestion SA, OP Trust
Domestic versus International Real Estate: Time to Go Global?
Seminar - February 2014
Overview
In the present low-growth, low-return environment, institutional investors have increased their real estate allocations in an effort to boost returns. With Canada comprising such a small percentage of the investable universe, is it time for Canadian investors to consider global real estate and start allocating more of their real estate portfolios to holdings abroad? Or is Canada still the preferred choice for the overwhelming majority of domestic investors?
Learning Outcomes
– The current state of geographic diversification in Canadian institutional funds.
– The return premium of investing in foreign markets with a regional focus on Asia-Pacific and the Americas.
– The overt and hidden costs of investing in foreign real estate.
– The Canadian investable universe in a global context.
– Future trends in geographic diversification of real estate.
Representation
Aberdeen Asset Management, CBRE Clarion Securities, Fiera Properties
Rising Interest Rates and Investment Real Estate: Is the Bull Market Over?
Seminar - November 2013
Overview
Following a long period of rising Canadian commercial real estate and REIT prices, the trend in REITs has reversed. Commentators attribute the setback to the rise in interest rates, but REITS were hit harder than many other interest-sensitive stocks, so the big question is “what’s next”? Are REITS oversold so that a bounce-back is foreseeable, or is the setback an indication that the real estate bull market is over? Real estate on “Bay Street” has been a dependable leading indicator of commercial real estate on “Main Street”. Are prices in the private market set for a fall? Or is it possible that REIT’s leading indicator status will break down, and that the wide spread of going-in cap rates over bond yields will protect the value of commercial buildings? Is the flow of capital into real estate so strong that prices could go up in the face of more interest rate increases?
Learning Outcomes
– Long-term relationship between interest rates and real estate returns.
– Factors drive REIT prices short term.
– Long-term and current pricing drivers in Canadian real estate: private institutional-grade real estate.
– Public vs. private real estate pricing relationships.
– Canadian real estate market in a global context.
– Medium-term outlook for Canadian real estate performance.
Representation
Sentry Investments REIT Fund, Bentall Kennedy, IPD (MSCI)
What Real Estate is Doing in Your Portfolio: Today’s Issues and Strategies
Presentation - May 2013
Overview
Real estate has played an increasingly large role in the portfolios of pension funds over the past 15 years and emerged as a primary asset class with the likes of equities, fixed-income and cash equivalents. In light of this, an overall understanding of real estate, current valuations and approaches to risk management in today’s economic environment will help audience members better understand real estate’s characteristics and anticipate its presence in a multi-asset portfolio going forward from both a Canadian and global perspective.
Learning Outcomes
– Real estate’s emergence as a mainstream asset class in a diversified portfolio.
– The variety of ways the asset class can be accessed (namely public equity, private equity, public debt and private debt).
– Return profiles across sectors, markets and countries.
– Traditional (Sharpe ratio, volatility) and holistic (diversification, concentration, lease length, covenant strength) perspectives on real estate risk management and measurement.
Representation
IPD North America
Private Equity Workshop: An overview of PE as an asset class and its basic characteristics
Workshop - February 2013
Overview
Private equity is now a globally recognized and accepted asset class. In recent years, PE has played an increasingly important role in the overall portfolios of institutional investors. This trend underscores the need for investment professionals both inside and outside the PE space to develop an understanding of how this asset class will affect portfolio allocations going forward.
Learning Outcomes
The workshop will begin with an overview of PE as an asset class and its basic characteristics. The workshop will then continue with selected concepts, portfolio management investment models, practical considerations and current issues. A 30 minute Q&A session will provide an opportunity to delve further into particular topics (attendees are encouraged to formulate questions in advance to help facilitate a meaningful discussion during the time allotted). Ultimately, workshop attendees will come away with a better understanding of PE as well as its benefits, limitations and its role in the context of a multi-asset portfolio.
Representation
Caledon Capital Management