Investment Symposium 2021
Last month, the 13th edition of the Investment Week took place.The Investment Week & Symposium is the largest student event in the Benelux on Hedge Funds, Private Equity, Asset Management, M&A, Trading, and Investing. During these five days, students had the opportunity to attend company presentations, participate in cases and interact with Traders, Asset Managers, and M&A companies. Thursday was the Investment Symposium. This article outlines the insights and pinpoints the highlights of the Investment Symposium on the 20th of May, 2021.
Due to COVID-19, the Investment Symposium was live-streamed for the first time from the Erasmus University Studio. After an impressive and fast-paced teaser that introduced the theme of this year’s Investment Symposium, ‘Capitalizing on Change’, five financial professionals shared their insights on this specific theme. As moderator Bob Homang (ING) got the conversation going with the guest speakers for the 12th edition of the Investment Symposium: Simon Wiersma (ING), Huib Boissevain (Annexum), Karin Roeloffs (Aegon), Olaf van den Heuvel (Aegon), and Jovan Ponsioen (Amundi). All speakers introduced different theories and insights. However, there were three topics that most speakers had touched upon. The guest speakers all shared their opinions about the threats and opportunities in a disruptive market, particularly in times of Covid. Next to this, inflation had a serious tone throughout most guest presentations, along with questions from the audience. Lastly, the guest speakers discussed the effect of taking Environmental, Social, and Governance values into account on their financial performance. In case you missed the symposium or would like a recap of the symposium, the remainder of this article will give you a brief summary of the highlights on these topics.
Learnings in times of disruption (particularly COVID-19)
“The next step after change is disruption”, said Jovan Ponsioen, Head of Distribution Benelux at Amundi Asset Management. Ponsioen emphasized that the winners of the past will not necessarily be the winners of the future. Thus, one must be skeptical about its decisions in assessing who will be the next winner on the market. Take Nokia as an example. Once a frontrunner of the mobile market two decades ago, now it has hardly any market share left compared to the past. To best determine who will be the winners of tomorrow, Ponsioen made students question themselves to think from the perspective of what will be there tomorrow.
Next to discussing the objective view of a disruptive market, the market during COVID-19 has also been taken into account. COVID-19 caused huge setbacks for many companies around the world, however there was also a great acceleration for disruptive companies. Nevertheless, not only disruptive companies have greatly benefited from the pandemic. Huib Boissevain, CEO and founder of Annexum, argued that within the real estate world, the real estate of supermarkets attracted a lot of interest from investors due to their proven resilience for a downturn. Nonetheless, Boissevain mentioned that the retail sector will still remain under pressure for the time being. Next to this, an important (upcoming) trend that he mentioned is the potential increase of offices near residential areas due to the COVID-19 pandemic. Even so, with different trends and positive influences that have been seen around the real estate market during the pandemic, a new uncertainty is now looming around the real estate market. This is considered to be a potential rise of interest rate in the market due to the potential increase of inflation throughout the world.
Inflation fears have been increasing in the weeks ahead of the Investment Symposium. This is due to the significant monetary packages that have been injected into the markets during the global economic downturn caused by the pandemic. Now that the markets are slowly recovering, inflation numbers have also been reported to be higher than expected. The guest speakers have expressed their views on an anticipated increase in inflation. Simon Wiersma, Investment Strategist and Investment Manager at ING, discusses that inflation can be a good thing if you have debt. Though, he quickly mentions thereafter that if you need to conduct a particular purchase today, you will be worse off. In addition to discussing the implications of increased inflation on the market, Wiersma shares his view on inflation and interest rates in the upcoming year. “Interest rates will probably go up, and inflation will also probably pick up a bit more,” says Wiersma. Wiersma further adds that he believes that inflation will likely not remain low for the time being since companies are reluctant to reduce prices after increasing them for inflation reasons.
Current trend: ESG
Ultimately, the professionals shared their perspective on the incoming question: does taking ESG values into account result in financial improvements?
“Environmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. Environmental criteria consider how a company performs as a steward of nature. Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.” (Scott, 2021)
For Boissevain (Annexum), ESG is a good driver to get things going on a global scale and offers, just as diversity, lots of opportunities. When looking from a supply-demand perspective, Olaf van den Heuvel, CIO of Aegon Asset Management NL, thinks that correct pricing might offer returns at a certain point. Ponsioen and Amundi Asset Management found that sustainable companies are not the ones that have the greatest returns on equity. In that light, investors are on the lookout for organizations that show improvements to allocate their money. If you then take ESG regulations and transparency into account, ESG does not balance out the other one, but it is an enhancer (for ROE).
Capitalize on Change
All in all, the Investment Symposium has made room for discussing contemporary topics on the market. With the world looking on where to capitalize on change next, it is certain that this will not come without hurdles. Some companies have flourished and made their entire fortune on certain disruptions on the market, while others have lost everything due to disruptions. With that being said, we will see many changes in the market in the next few years. Some of the changes will be expected, and some changes will not. Though, it will be the unexpected changes that are going to be the most interesting ones to witness.