After the 2nd JPC Online Conference
November 18, 2020

I'm Yano, a market maker and advisor, and I participated as a viewer this time as well.
The first part is from Towers Watson consultant Horiuchi, under the title of "Pension asset management in preparation for the coming shock", and how to deal with pension asset management while the uncertain economic market environment is expected to continue. It was a practical content.

I will omit the details, but what impressed me was the proposal that "even if the current governance of the company's pension is not sufficient, we should create a means to supplement it." It's easy to look for reasons such as "low understanding of company operations" or "no human resources to manage risk", but I tend to look for things that can be done with the current governance, or outsource some of them. I felt convincing at the proposal that we should make efforts to improve the efficiency of asset management as much as possible by devising such things.

In the second part, IFM's representative in Japan, Mr. Masada, gave an explanation on the performance comparison of various assets and infrastructure assets after the corona crisis and the status of various assets in the infrastructure assets under the title of "Infrastructure investment under the corona crisis". was. Isn't the movement of people around the world disappeared due to the corona crisis, and infrastructure projects such as airports are destroyed? I think there are many pension funds who are worried about this, but I think I was a little relieved because there was an explanation that the decline in the valuation of infrastructure assets was lower than that of stocks and business bonds. (Even during a shock such as the corona crisis, the valuation of listed assets such as stocks will drop significantly due to the successful sale. On the other hand, unlisted infrastructure assets will also have a risk premium (interest rate that discounts future income to the present value). If the evaluator reviews (raises) the value, the value evaluation will decrease. ”However, the effect is relatively small.)

However, among the infrastructure assets, the decline in airports was large, and the decline in infrastructure assets related to renewable energy, telecommunications, and water services was relatively low. After all, the conclusion was that "dispersion is important" here as well.

Currently, the bond interest rate is almost "0", but it was said that infrastructure assets backed by business profits are suitable investment targets for long-term investment such as pensions. What are your thoughts on this?

Dissenting opinions are also welcome, and we would appreciate it if you could give us your opinions. (I think it's important to discuss)

Please contact the following presenters directly for the materials of both companies.

Towers Watson Investment Service: Mr. Horiuchi kuniko.horiuchi AT willistowerswatson.com
IFM Investors: Mr. Masada yuji.shoda AT ifminvestors.com

AT is changed to @.