10 years later: Money management

Reflections on the global financial crisis and its aftermath

Editor's note: P&I reached out to industry leaders to collect their thoughts on the global financial crisis and its ongoing influence on institutional investing. Comments have been edited for space and clarity.

"If it was about alphabet soup, we were invested in it. And the alphabet soup blew up in 2008, the first part of 2009 — and we decided alphabet soup wasn't such a good idea." Michael Sabia, Caisse de Depot et Placement du Quebec

The worst moment of the GFC was "being on the phone with a client who was shaken beyond belief ... nothing you could say to them" would make them believe markets worked. David G. Booth, Dimensional Fund Advisors

"When the bullets are flying, many (LPs) will be under their desks and will not be aggressively buying debt." Daniel Zwirn, Arena Investors

"Once a former unit of Lehman Brothers and now a private, independent, employee-owned firm, we are doing many things differently now as a result of the crisis. A few examples would be running the firm focusing on quality, not size, and we have been quite explicit about not focusing on growth for growth's sake, which is a reaction to what we all experienced." George Walker, Neuberger Berman

"We're set up and managed in a way that we invest for the long term. Everything worked for us in the end, but it was a very difficult time."

R. Dean Kenderdine, Maryland State Retirement & Pension System

"I think the major decision (we made) was not to panic and remain diversified and committed to being invested in the market." Ron Virtue, JM Family Enterprises

"One of the worst things was that agencies were working alone. Lobbyists could sow discontent within the agencies." Sarah Bloom Raskin, former deputy secretary of the Treasury Department and former Federal Reserve Board governor

"2008 was like a near-death experience for the market." Christopher J. Ailman, California State Teachers' Retirement System.

"Are we sure we understand what's going on? We are not serious about digging into the information we have. The American government is not understanding what is happening in our markets." Robert Jackson Jr., Securities & Exchange Commission

When the auction preferred share market ceased functioning in early 2008, "I realized this wasn't Kansas anymore, or — since I'm from Arkansas — that this wasn't Arkansas anymore.'" Thomas E. Faust, Eaton Vance (EV) Management (EV)

"My conclusion was we were far, far, far closer to a bottom than we were to anything else." Ashbel C. Williams Jr., Florida State Board of Administration

"The biggest panics that I had to deal with had nothing to do with 'I'm losing money,' and all to do with 'Where is my money and can I write a check?'" Brian McDonnell, Cambridge Associates

"The whole culture of risk management in organizations has changed." Peter Zangari, MSCI Inc.

"You cannot cram for a crisis." Bennett Golub, BlackRock (BLK)

"We didn't even finish completing the path, and now we are ripping up the bricks." Michael Barr, former assistant secretary for financial institutions, Treasury Department

"I think the notion of that never happening again is not realistic. ... It's an investor's job in a lot of ways to be prudent.'' Dennis Simmons, Committee on Investment of Employee Benefit Assets

"It's the greatest monetary experiment of our lifetime." George Gatch, J.P. Morgan Asset Management (JPM)

"Everybody's a momentum investor today, thinking a bell's going to ring (when the music stops) and they'll be able to get out." Mark Spitznagel, Universa Investments

"In a way, the crisis gave me permission to start changing things." Michael Even, Numeric Investors

New Zealand Super was "operating with a limited information set … making decisions in the context of not knowing stuff." Matt Whineray, New Zealand Super Fund

"The No. 1 thing we learned is that balance sheets matter." Charlie Bobrinskoy, Ariel Investments

"Prior to the crisis, investors treated all government bonds as risk-free assets. But was a Greek bond a risk-free asset for the Dutch client? The concept of risk-free assets — a relative not an absolute one — was a problem due to practices. And we've seen a repricing of these assets since." Pascal Blanque, Amundi Asset Management.

The GFC will, hopefully, be "the worst financial crisis in our lifetimes,'' but there could still be another economic crisis. Chinese banks could be an issue. David G. Eichhorn, NISA Investment Advisors LLC

With $3 billion in cash in liquid investments and no debt, T. Rowe Price "kept hiring right through the crisis. Some of our top investors today are people who we found then." Edward C. Bernard, T. Rowe Price Group

"The biggest decision we made was to rebalance back to our strategic asset allocation, and that paid off for us." Mansco Perry III, Minnesota State Board of Investment

"The path for normalization is quite complex. It will take years to assess what the crisis' impact was." Daniel Ivascyn, Pacific Investment Management Co.

"Why pump gas into a fire?" Christopher J. Ailman, California State Teachers' Retirement System

"Perhaps the most important way the (real estate debt) sector has grown is the degree to which its capital base has broadened." Adam Ruggiero, MetLife Investment Management

Credit managers are leveraging their portfolios to boost returns: "It is artificial, not sustainable … and it is mispricing risk." Christopher J. Flynn, THL Credit Advisors

"There's always a desire to find a little more logic in our strategy than perhaps the truth would be. We're opportunistic. We're nimble. A lot of the growth and development was not driven b our design but by the market." Thomas Faust, Eaton Vance

'We are now, since 2008, experiencing the greatest manipulation of our monetary system in history.'' Mark Spitznagel, Universa Investments