Institutional investors large and small are finding investment opportunities in the disruptive nature of technology and venture capital, said investment professionals.
Opportunities are particularly evident right now in the venture capital space, and within that at the "very, very early-stage venture capital market — I'm talking about seed," said Rosalind M. Hewsenian, chief investment officer of the $5.4 billion Helmsley Charitable Trust, New York.
Speaking at Pensions & Investments' Global Future of Retirement conference in New York on Tuesday, Ms. Hewsenian said opportunities must be observable and actionable. Beyond that, the investment team assesses opportunities based on three criteria: who wins, who loses and where are the capital gaps. "One thing I've learned about investing (is that it's) not so radically different from a Macy's shoe sale," said Ms. Hewsenian. The first question is "Are the shoes ugly? If not, buy two pairs," she said.
The foundation is active at the seed stage of venture capital. "Not many investors are investing there (as they) don't want to take the risk." She said that takes a lot of due diligence, but that's where the best growth is available.
Also speaking on the panel was Ash Williams, chief investment officer of the $170 Florida State Board of Administration, Tallahassee. He said investment opportunities right now include the rise of millennials, growth of emerging and frontier market populations, and advancing technology.
"We are active in a couple of areas other big funds aren't," including venture capital, he said. He said investors that want to play in the technology and software opportunities want to be in venture capital, but acknowledged it is "not the easiest place to be."
Panelists also discussed the pros and cons of being large and small in size as institutional investors. Ms. Hewsenian said the foundation is "large enough (and) small enough to do whatever we want," including playing the gap left by the re-regulation and disintermediation of banks.
Added Mr. Williams: "Some people play the stand-up bass; some people play the piccolo," but "they all contribute to the orchestra."