The Institutional Investors Roundtable held a summit recently with high-cost, low-return investments as one of the primary topics of conversation. The spell seems to be wearing off, everywhere you look there’s a realization happening, a rationalization.
In the fable The Emperor’s New Clothes, it takes the guileless innocence of a child to yell out what had been plainly apparent to all the townspeople and nobles who had merely been going along with the ruse out of convenience or willingness to believe. We’re watching something similar play out in the investment world only the participants themselves are awakening all on their own.
Investors responsible for more than $2 trillion recently gathered at a resort in the Canadian Rockies, far from the news media and, more important, far from Wall Street.
Those in attendance, including leaders of Abu Dhabi’s sovereign wealth fund and France’s pension system, were there to consider ways to put their money to work together without paying fees to private equity firms and hedge funds. Over that weekend, three of the attendees completed the details of a $300 million investment in a clean-energy company.