The future of institutional investing is in the "portfolio positioning system," said Ashby Monk, leader of Stanford University's Research Initiative on Long-Term Investing, in a LinkedIn Live event Friday moderated by Jennifer Ablan, editor-in-chief and chief content officer of Pensions & Investments.
Mr. Monk, who has served for over 10 years as executive director of the Palo Alto, Calif.-based Stanford Global Projects Center and whose research has primarily focused on the design and governance of pension and sovereign wealth funds, said that his latest research is based on institutional investors' growing commitment to investing in technology.
"Technology obviously is going to be a massive part of that going forward," Mr. Monk said. "We're going to get out of the world of the spreadsheet and into something a little more professional grade over the next five years.
"A lot of investment organizations are spending a lot of money on technology, and so why are they doing that? What is the business value of that spend? It's upwards of 1 basis point. Oh, 1 basis point doesn't sound like very much. Well, it is if you've got a half a trillion dollars," said Mr. Monk.
In his interview Friday, Mr. Monk said the primary motivator in his life over 20 years has been achieving higher returns for institutional investors, and part of the research he and his team are undertaking is to get to the point in which that 1 basis point of investing in technology achieves alpha of well over that benchmark.