McGill International Portfolio Challenge
MIPC focuses on addressing societal issues which large, institutional investors play a critical role in. Our cases center on solving these issues through innovative portfolio strategies that satisfy the needs of a broad range of stakeholders with competing interests
How can long-term asset managers find ways to sustainably generate returns while minimizing the risks in the current environment of ultra-low bond yields? We focus on the ongoing pension reform in the Netherlands and study the portfolio design of a fictional newly launched collective defined contribution plan (CDC) which provides new possibilities for plan members to share risks with each other.
We are now seeing countries seeking independence as protectionist tendencies are being revived and geo-economic dynamics are changing. How should long-term asset managers invest in the midst of rising protectionist tendencies and social inequalities? We study the fictional launch of the British National Strategic Fund, a new sovereign wealth fund with a triple mandate to generate
risk-adjusted returns and promote economic equality and independence.
How do we align a fund manager's fiduciary duty to deliver returns with long-run environmental sustainability? We study the case of a fictional fund based in Newfoundland and Labrador. The fund is under pressure to divest from its holdings in the oil & gas industry, which have traditionally been a large, revenue-generating component of the fund's assets and one of the largest sources of economic growth in the province. The purpose of the case is to devise an optimal portfolio strategy that accommodates the competing interests of the different stakeholders involved and addresses climate risks.
The underfunding of U.S. state pension plans is incredibly complex and difficult to solve because it involves a uniquely large and diverse group of stakeholders with conflicting interests: unions, municipalities, state governments, and plan members. This complexity is compounded by U.S. regulation that mandates pension funds to discount their liabilities at the expected return on their assets. We highlight these issues by studying the case of an underfunded public pension plan in a fictional U.S. state: Vandalia.
When a private pension plan runs a deficit, should the fund manager try to eliminate the deficit by taking on more risk and aim for higher returns, or is it up to the corporate sponsor to make a special contribution to the plan? We study the case of an underfunded private pension plan in Canada.