The Benefits of Investing for the Long-Term Despite Pressures by Financial Markets & Shareholders

On November 4th, 2014 EACC New York members and guests heard from Blackstone, McKinsey & Major Pension Funds about ”Leading for the Longterm” in a moderated panel discussion with CEO’s from major US and EU companies, Pension Funds and other market participants on the benefits of looking beyond the next quarter, including a comparison of US & EU approaches to the subject of long-term investing

Short-termism is undermining corporate investment and holding back economic growth. If large asset owners adopt strategies aimed at maximising long-term results, then other key players will follow suit. — Mark Wiseman, CEO, Canada Pension Plan Investment Board.

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In the light of current headlines such as Harvard Business Review’s “The Best-Performing CEOs in the World” and the New York Times’ “Weak Results at IBM as Its Strategy Shifts“, as well as developments between CalPERS and hedge funds and the changing investment strategies at private equity funds, we believe that this program was highly relevant.

Panelists included:
• Dominic Barton, Global Managing Director, MCKINSEY & COMPANY
Pat Russo, former CEO, ALCATEL LUCENT & Member of the Board of Directors, ALCOA, MERCK, HP
John Studzinski, Senior Managing Director & Global Head, BLACKSTONE ADVISORY PARTNERS LP

The program did put forward ideas and concrete proposals for both corporate executives and investors to:

– establish a more effective dialog on long-term objectives and risk appetite, and assure that investments are in line with those objectives
– actively engage asset owners and build long-term relationships
– develop and demand long-term metrics on the performance and health of the company
– adjust the structure of corporate governance to enable long-termism

As one would expect the discussion was highly dynamic and encouraged extensive Q&A and audience engagement with the panelists. Audience members included a select group of ca. 90 c-level executives, executive level representatives from pension and sovereign wealth funds, PE community & selected funds, relevant other financial services, consulting firms, legal advisers.