YouSaid · the spoken record

Hiro Mizuno

lines on the record: 59
first: 2020-07-09
most recent: 2020-07-09
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“I want to tell myself, 20 years old, Hiro, you are much more capable than you think. I actually always underestimate what I can do. And I started getting more confidence as I got older, but I think I should have got a bit more confidence in what I can do when I was younger.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Be thankful, be grateful. That's only the comments I can remember that my mother repeatedly told me, like when I say something, I achieved this, I did that. She said, you have to be thankful to your people who supported you. So being thankful, that's the best lesson.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Actually, trying to expose myself to all the different ideas and opinions, and I enjoy new stuff and I watch all the different type of movies and listened to all the different kind of music. I think that's probably the best way for me to self-educate because usually I got a lesson from a totally non-professional sources because when I came up with the concept of what's the right stewardship activities for universal ownership, the book I referred to was the literal prince. Literal Prince was the best role model for me to be a good steward.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Guilty because we are basically doing it by borrowing from future generations. And that's what we did during the Lehman crisis. We really struggled to bring it back to normal. And then we got another pandemic hitting the market. And we are repeating it again. So I'm just feeling so guilty that this is a painkiller in a way, which is necessary because when we are suffering from the unturable pain, we need a painkiller. But the point is a lot of painkillers to actually recover from Lehman crisis. And before we bring it back to normal for future generation, we move into this another pandemic and we just repeating the same. So we are easing the pain of today by borrowing from future generations. And I don't disagree. We need a painkiller, but I'm becoming more and more guilty every time I see the story. Market is actually moving.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“I really cannot. Live with a little bit. Of a hypocritism, or like I actually always struggled with the gap between what they talk and what they do. I actually observed throughout my time at the GPF there's a lot of inconsistency in the practice what we do. So that's something. And then the other thing, oh, finally, we are now seeing the very hot stock market. And again, we are actually deploying all the monetary and the fiscal policy to ease pain. And when I was at the GPIF, the people asked me about my view on the quantitative easing and monetary policy by central banks. I always told them if I am allowed to be very selfish, I would like the older central banks to continue to print the money to make my job easier as a CIO because asset inflation is made my job easy. But I felt so, so...”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“I actually don't have a hobby now, so I was hoping to create a new hobby when I retire from the GPI. But due to this coronavirus, I mean, I just becoming like spending more and more time on Zoom from morning to the evening. So yeah, I actually need to find the outdoor healthy new hobby. I'll report back to you when I”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“My hope is in 10 years' time, this ESG will become not the debated subject among financial professionals. We just take it for granted. These are the factors that affect every single aspect of our investment or financing activities. That's what I hope. And if I fail to do that or we fail to do that, probably we wouldn't achieve what the Paris Agreement or some sustainability goals that people are talking about.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Topic in the industry, but there's not even a chapter in a CFA curriculum or MBA curriculum. So I'm actually trying to just bring that into the business investment professional education. So that's one thing I want to do. I recently joined the Tesla board and I actually may join us several others. I think we need to continue to put this agenda on sustainability and inclusiveness. There's different approaches we can think of. And the one way to bring in more technological innovation to make it happen, the other thing is actually change the people's mindset or like a cultural aspect of our society. So those kind of things I'm actually trying to commit some of my energy while I'm actually taking advantage of not committing to a full-time operational role.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Actually, decided to push this agenda like an ESG agenda in my post GPAC life. So before I maybe committing to another full-time role, I decided to do several things which I used to think is necessary to really promote this agenda throughout the business community, which is business education and professional education. As you probably see some people may see my Twitter accounts, but I agreed with the Harvard Oxford and now Cambridge to become their executive fellow on the agreement so that I can contribute to bring more sustainability ESG agenda into MBA curriculum. Also, I serve on the future of finance advisory council and CFA. That's another professional education curriculum I think must change because given now the ERC is one of the hot”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“That particular letter, which is available in the GPF and the coasters and the US's website, I guess, is now signed by more than dozens of the asset owners. Have one new aspect or like a new concept in that, which is asset owner's responsibility. Because the asset owner, we always talk about our entitlement as an owner. But on the other hand, we usually very, very reluctant to talk about our responsibility as an owner. And that led us trying to make that statement too.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think climate change and some other sustainability risk and inclusiveness risk as well, like gender diversity or other diversities, which becomes Actually, sense that the more and more asset owner is agreeing to our philosophy. So universal ownership philosophies, which when I started using like five years ago, nobody was using it, but now I hear universal ownership or university investor vocabulary everywhere when the big people like Cal first talk about their strategy and some others as well. So I just sense that the timing is maturing for us to make a very clear statement as an asset owner, as a guardian of long-term capital for retirement benefit. So just before I left, we came up with the idea of like the asset owner letter jointly signed by other big asset owners to basically send a message to the world, both to the asset managers and also the other portfolio companies, what we expect from them. But what is most important aspect of”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Unfortunately, last year we used the TCFD framework and came up with a conclusion that our portfolio on the path of the three degree instead of two. And that means what is on that trajectory. So rather than trying to rebalance or tweak our portfolio to make our portfolio look better, we just remain as the owner of the universe. And we keep just ascending alarms to the world. Our portfolio looks like this. And that means the world is on that trajectory.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Of those problematic business to the people who don't care about it. We don't want it to reduce a carbon footprint by divesting carbon heavy industry because it doesn't reduce the carbon footprint of the world anyway. So instead, GPL started reporting and compliance to a TCFD passable financial disclosure. I call it a litmus test because GPL have one of the most sizable and most globally diversified portfolio. So the carbon analysis of the GPF portfolio is actually the analysis of the global situation. We just cannot create a carbon-free portfolio in the world which is not carbon-free. So the GPF, the other carbon analysis of like a sustainability analysis, kind of like a lithmap test of the way the world is heading.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, as sort of how much of the portfolio still managed possibly, we just cannot drastically reduce the carbon portfolio portfolio. Rather, I actually refuse to actually compete for less carbon footprint from the GPF portfolio because we can easily reduce the carbon footprint that the global portfolio by divesting some particular like a carbon heavy industry. But given our universal ownership approach, it doesn't make any difference because when we, let's say when we sell the carbon heavy industry or the maybe divesting coal or divesting tobacco or whatever the divestment strategy, some other ESG investor take, I don't criticize for them doing it because they have on their own strategy. But from universal ownership, like a perspective or like following our philosophy, it sounds like we are passing ownership.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“While the size of the market has tripled and quadrupled, I actually don't have the exact data off hand. But the GPF's portfolio or the own portfolio of the green bond or like a sustainability bond is actually almost nothing before they agreed with the World Bank, I think last March. And when I left, they had already a several billion dollar portfolio of the Green Board issued by those multinationals.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“The green board is basically the issuer promises to use that proceed into a green project. So that's what the green bond is all about. So when the World Bank says we are issuing green bond to finance the green infrastructure, then there's a lot of then it comes with the two merits to active managers, right? One is that that's a kind of easy way to get the alpha and a second is they get a brownie point from JPIF as we say we want our portfolio greener even in a passive in a fixed income portfolio.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I think there's an opportunity for their business. And finally, but not the least, when I was a JIPA, my team started the green bonus sustainability bond platform with the multinational development banks, started as a World Bank Group. And I don't remember exactly how many, but the analog GPF has actually partnered with the over-A rated the multinational and now started expanding their program into the government agency like KFW. issue green or social sustainability bond they can actually private a place directly with the gpi of the fixed income passing managers and for them that's a free lunch because if they swap to related the sovereign bond with the triple related amountra they can easily get some extra return so uh there are several ways to approach a fixed income portfolio with that like a”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Credit rating, and the second is youth. So the credit rating is the one have to change to really bring the sustainability agenda into the other fixed income portfolio. But we engage and I personally engage with the major credit rating agencies to talk about the sustainability and ESG in fixed income rating. And they again struggled because of the investment time horizon issue that's associated with the fixed income product. But in the end, some of the major credit rating agencies started providing ESG rating as a separate rating. That's maybe the compromise they came up with, but we need credit rating agencies to real take up on this agenda for us to really change the fixed income market. But on the other hand, the payment goal and those people started introducing the ESG product, SDGs products.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Maybe continue to finance until the time it becomes too late. And I always thought it's much more difficult to make the fixed income investor realize the things like a climate change risk because there's an investment horizon issue. But in the equity market, they shouldn't exist, right? Because the price of today's stock market is meant to be the present value of the future cash flow. So there shouldn't be a tragedy of horizon in the stock market. But I'm just a little bit red herring. But I always joke about Tragio Horizon shouldn't exist in the stock market, but it does exist because we have a short time, even without fixed maturity. So coming back to the fixed income question, so it's a difficult one and also there are basically only two major factors to dictate the pricing of the fixed income. One is”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Fixed income is a very interesting one because it's easier to beat the benchmark. The fixed income compared to the smoke market, there's much more consistent alpha generation. It's probably just the outcome of the easy to be the market benchmark used by the asset owner like GPF. So we had a much higher active portfolio. And then when we started promoting the ESG four years ago, I asked my team that while we don't do the ask the same from the fixed income managers, at that time people are very skeptical about the ESG integration in fixed income portfolio for several reasons. One is it's just not done things. But very few are professional asset management companies talking about the ESG in a fixed income at that time. And the second is this is what the Marc County calls.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“They are stewardship team or like engagement manager go to meet the CEO without even knowing whether they are actually owns that company because the fund manager trade in their own discretion and then the engagement manager meets the CEO talks about the long-term sustainability issue. It doesn't make any sense either. So we started the, I started raising the sort of kind of scrutiny into how the active managers, their engagement with the company and their portfolio addition is actually linked, which so far doesn't seem to be very well coordinated. And that's actually also reflected in the sort of industry custom that when the afternoon manager engaged in a corporate executive, the African manager don't even tell them how many stock they own because they may not own any stock at all or maybe on a lending. So this is a”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Push the aflidomones is the more proactively like a more actively engage with the portfolio companies executive, that's taken up a lot of executive time. And we need to make sure our asset manager don't waste the other portfolio companies like the CEO's time and that you use it to promote the long-term sustainability or promote the long-term sustainable growth of that business. So that's something we kept saying to our active passive managers and therefore active managers again this is one of the dilemma I face. The active managers, their principal primary mandate is to make extra return and then that's why the portfolio manager seems much stronger save than their stewardship expert or like ESG analyst. And a lot of times we observe”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think that's increasing. It used to be just a silent investor. I now serve on several corporate boards and I heard a lot like the passing manager used to be very easy ones because they actually either just follow the ISS and the grassroots type of the proxy boarding advisors. But now they actually have their own, they seem to have their own opinion. And they actually tend to hold the actually much more voting power compared to the active houses. So their impact or influence on the corporate executive has drastically increased. And now what I'm saying is as you're influenced increases, the more responsible you have to become. So this is the one thing we have to be very careful is when GP”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“So that's why we wanted to make it very explicit. When you say you analyze it, we expect to use it for your investment decision. So that's just a kind of stating obvious, but that's exactly how also we saw on a PRI. I saw on a PRI board and that's the definition of PRI of the ES integration. So we are kind of copied it.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“But I was getting there. And about the investment decision making, this is even more difficult. But some of my staff told me like Mr. Mizuno, this firm, they say they do ESC analysis, but hearing how they make a decision in investment, there is no real communication between their ESD team and the portfolio managers. So they can sense it. But the reason why we were very explicit about an investment decision is simply, I was getting tired of a lot of asset managers keep telling us, we do this much analysis in ESG and we do this much analysis on this and we hire this, we buy this information set and I said and in the end I said how do you use it for investment decision making and a lot of the asset money became quiet so I said okay if you use it for analysis but you don't use it for your decision making what's the”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“And he said, I don't know. Okay, yeah, then I don't know either right. So, this kind of things, I mean, I always find that this industry, we are very afraid of doing something new without having a clear concept of a measurement and a standardized data set. But I always think in real world, you need to start it. But when we started, we need to make sure that we don't overdo before we get the confidence or knowledge, kind of like pretty much three years. You know, first year, just tick the box. Second year, we started comparing third year. I mean, the people started having an opinion, which one works better or the worst, but that's a continuous process, particularly when we started evaluating new things. It's still hard. So even for analysis, I really cannot tell you I had enough confidence when I left that the GPF can really evaluate different analytical approach.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it's not easy because even the asset manager don't know sometimes how they do it. And so we started this way. First year, when we say we are going to do that, we basically ask the asset managers how you guys do it. So basically we tick boxes when they said we do this this way. We don't score them or differentiate their score on those because”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Both of those sides, you mentioned analysis and decision making, and particularly on the active side, how did you figure out what you wanted to kind of measure or look at to make sure that these managers were integrating ESG principles?”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Is what we expect from active managers, but particularly GBES work on passive managers, which people thought is very innovative and is very brand new. And I can reflect that a lot of discussion with the major passive house, some of them actually are the very, very reluctant to agree to that model. But I think if you can hear what the people are saying, a lot of like a passive manager now saying that they are active corner and they are building up their stewardship capacity. So I think we didn't get that direction wrong in my personal opinion.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“ESG into their investment analysis and decision making. And also we choose the active managers who control the negative externality of their portfolio companies activities better. But this is basically the product of our universal ownership philosophy because even if one of our active managers build the portfolio which performed better short term, but those companies in their portfolio is actually they're producing a lot of negative externality which damage the long-term sustainability of the environmental society and also the stock market that active manager may be paid better for their performance but GPF portfolio will be affected because we own the universe. So we made it step by step we made a very clear statement like this is what we expect from the passing managers.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“And we actually raised it the acting manager can deliver like, you know, sort of like the sustainability, the leadership, or like, you know, the ESG, the promotion. And initial response, even from my own team of the asset manager management team and the investment consultant and obviously the asset manager was, that's not their job. Their job is to deliver alpha. So I said if you keep telling me that's only your added value, you should be only paid when you deliver that. So that's kind of like how it started my discussion of homelands-based fee structure. But in the end, that's actually the help us get the long-term alignment. And last year, GPF made a very clear, explicit statement to our active managers that GPIF expects all our active managers to integrate”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Approach to the passing managers, and of course, I got huge pushback saying we are not paid enough to do that kind of work. We responded saying like, you know, if you gave us that compelling proposal in how to energize or improve their stewardship activities, we are prepared for extra layout fee for their stewardship service. And by the time I left, there are only two passive managers who propose their GPIF, the new business model with specific KPI, how to improve their stewardship activities and they received extra AL fees from GPIF. So the passive one, that's how we promote the ESG. When it comes to active, if you remember what I said about the fee structure discussion, that's actually the reflection of my long discussion with the active managers. What's the kind of the value they can deliver?”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Is the index provider's job, not the index, master manager's job either. And the index tracking, that's what people say, that they add value, but I really believe that should be cost-free because we don't need a human to track the index anymore. Only the area I thought the passive manager can really add value and differentiate their service is stewardship activities. So we changed our evaluation scoring model to allocate 30% of the total score to the stewardship activities in evaluation of passive managers. That was a game changer. We made it very clear, this is the area you can make a difference. So stewardship becomes area that the policy manager should compete for their GPF mandates. So that's”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“The classic managers have to buy or sell whatever the index provider instruct them. So this area, I actually thought that they have very little added value, but they actually have the alliance share of voting power and that they can actually engage with the company. So that's what we call the stewardship activity or active ownership activity. And that area was not seriously taken by the passive managers like four years ago. But I started saying like if we decompose the value chain of passive management, you can actually decompose that into index composition, index selection and index tracking and active ownership of stewardship activities, right? And index selection is basically it's our job. It's not passing manager's job. And index”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“We need to just find the different approaches to passive and active. And passive is very much the focus of our ESG advocacy because, first of all, that accounts for the alliance share of GPIF portfolio, as well as it's becoming more and more significant in every stock market, including Japan and the US. So they have to focus on how to change the practice of the passive portfolio management. Four years ago at the Milk In, I was on a panel discussion and we talked about a passive. And then I just said that from now on, the managing portfolio possibly is not good enough if they want to keep the GPF class in mandate. We want them to be active owner.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Not to be the universe because we cannot. So let's see what we can do to make that universe better. And then as you asked me, the sustainability concept came in to that concept because once we started looking at how to make this capital market better, we need to think about what's the foundation of the capital market. And the foundation of the capital market is basically the society and the economic activity of private sector and then also the policymaker as they are also the issuer. So we just basically came up with the concept of portfolio.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“When I analyze the long term performance of the big asset owners, as I said earlier, I concluded whatever we do, our performance is mostly dictated by the global economy or global capital market we invest in. So we just thought rather than trying to beat the market, that's the kind of the conventional, like a traditional way to evaluate the outperformance or like after the manager's performance. We should contribute to make the whole capital market more sustainable. So we just came up with the concept of a universal ownership. That's a concept which actually written by the some of the financial academics many, many years ago. But according to Powers Watson, GPF is probably the first one trying to bring it into the practice. So we basically just said, we are owner of the Unicapital Market Universe. So we are universal owner. So our job is”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“You talked about the core of your efforts really owning global economies and global markets and doing what you could to improve their performance. So at what point in time did that turn into this notion of sustainability?”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Several things we did. And we were regulated not to take the equity management in-house, but actually I made a conscious decision GPF should focus on how to optimize or create the mutually beneficial partnership with the acting managers. So I introduced several new initiatives basically just to achieve that. The one is we always had a big debate with the active asset managers about our fee level because they continue to complain the agenda.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Efficient, we need to promote the active investment in a stock market. So I try to say every time I have the chance, I'm a supporter of the active portfolio management and we wanted to increase actively manage the portfolio, which actually I didn't succeed as much as I wished.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm all following the conventional finance textbook says, but what I thought is the passive investment is effective or efficient because it takes all the active managers or the active investors' opinion into their pricing. So basically they are free riding or the active investors. I'm not only talking about active portfolio manager, but including individual investors, active investment decision makers. So by definition, if everybody becomes passive managers, the market becomes very inefficient. We need to keep active investors activity to make via the passive portfolio, the passive strategy efficient. But I keep telling the people, we have to depend on the passive and for the passive to”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, we used to have 80 to 90 percent of the total fund managed passively. My view is I received a lot of advices, including criticism that given the GPF size, we should put everything in a passive and the cost, the bargaining power, particularly on a passive is very strong. So basically passive is almost like a cost-free. So they put everything in a passive. And people argue, even people in academics, it's very hard to get the excess return by doing active. So for the big fund, put everything in a passive is the most effective way. And there's a lot of academic paper to try and prove it. So throughout my tenure, I always advocate it, GPFs should be a support of active portfolio, active management for several reasons. One,”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Has that kind of long and time horizon in today's discovery process? So the home country buy us is something like I always get so excited. One of the most difficult discussion points for public pension funds, I mean, a US may be okay because you have a huge capital market domestically, but for the other pension fund, it's actually a tough one. And I'm actually personally a supporter of the home country bias, even though it's like a different factors to consider.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“And as I said earlier, one of the kind of fates the CIO, the CEO of the public management fund has to accept this, as I said, it's not only about the financial optimization, but we just need to make sure our constituency would support it. So reducing the Japanese stock allocation requires a lot of hard work to actually explain to Japanese constituency, including political leaders. And also the other, you can argue that whether the stock market of today is the best measurement performance for the long-term future, because GPF, the investment time horizon is actually 25 to 30 years when they decide the policy asset mix. And I really don't think the stock market is actually”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Whether the home country biases that have one for several reasons, because it's not as simple as like, you know, the weather we should have the allocation reflecting global market caps, which basically like Japanese, you know, the stock market probably represents like the 5% now. That's actually has a lot of different aspects to consider. Like one is the currency risk, because the 100% liability was in Japanese yen. So taking currency risks, which is academically proven that for the long term, it's a zero-sum game, but the short-term volatility is really high. So the taking or exposure to the foreign currency is actually the tough one for the people, for the public pension one CIO like myself. And then also, this is a difficult one because this one, even among the professionals, there's mixed opinion about the home country buyers.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think the GPF actually revised it just on my departure. There are policy aspect mix, which actually get 50% global FT and 50% in the global fixed income. And when I was a CIO, 35% in the Japanese fixed income, but now it's reduced to 25%. So it's actually like, you know, the quarter of each domestic and foreign and equities and domestic foreign fixed income and just 25 each.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“GPIF, particularly on my arrival, they thought the GPIF is going into the very aggressive direction that put the Japanese people's fresh suspension funds in a gamble by investing more in the risk assets. So it is a difficult time. First of all, you know, managing the public pension fund, we just cannot manage this with the ideological approach. We just need to make sure”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“As a member of the trustee board at that time, when the other GP made a decision to change the asset allocation from the mostly Japanese government bond to half equity portfolio. So as a matter of fact, I was a part of that decision making. But what I thought was, first of all, that the decision was welcomed by investment professional and the financial industry because they actually thought the sleeping lion, that's what they call GPI, but that's all is now waking up and they may actually create a lot of business for the financing financial industry. So are the decision was received by the financial industry with a lot of enthusiasm. But on the other hand, we received a lot of criticism from the genome media and the opposition parties. And I think that affected the people's view on”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“On something which actually makes marginal difference, why do we try to spend our time to make the real difference, which is trying to contribute and do things to make the whole capital market more sustainable? So the beginning of our journey and my journey and that decision actually made my life much busier than I thought.”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source
“Made by the very high level of policy access decision is very marginal. So the one way that I could have said that I don't have much to do, so let's put it in the index and go to play golf and then the arrest on the beach. And I actually joked about it with my team because when I had a huge debate about how to select the managers, how to bring in the different strategies, I said, I thought makes very little difference and I put in an index and I go on a rest. And maybe, you know, that this year we made a huge return, much better than compared to the required return. So we put everything in an index, go to the beach, right? So that's the one the extreme way to provoke the internal discussion. But instead what I decided to do is I tried to change people's mindset. We had been spending a lot of time and energy on”
2020-07-09 · Capital Allocators · Sustainable Investing 10: Hiro Mizuno – Changing the Game (Capital Allocators, EP.148) · IDENTIFIED FROM THE TRANSCRIPT · source