Pedro Guazo, Representative of the Secretary-General for the investment of the assets of the United Nations Joint Staff Pension Fund (UNJSPF), shared a view on the near-term global economic outlook and expressed confidence in the Fund’s long-term financial sustainability at an event in New York.
“Over the next five years, we can expect to see more isolated economies, with high-income countries investing less in aid and more in defense,” said Mr. Guazo, addressing an audience of institutional investors at the 12th Annual Tri-State Institutional Forum, organized by Markets Group.
Against this backdrop, he highlighted the usefulness of the Fund’s global investment universe, which includes dozens of countries across virtually every time zone. The Fund’s Europe and Emerging Markets portfolios are currently performing particularly well, Mr. Guazo noted.
He emphasized that the Fund’s investment horizon is very long-term, with a priority on stability over a 20-to-30-year forward-looking outlook. This stems from UNJSPF’s objective of meeting the pension obligations that protect the retirement security of its hundreds of thousands of members.
Accordingly, the Fund follows a strategic asset allocation (SAA) which it adjusts every four years, using rigorous analysis and scenario planning to set target ranges for each of its asset classes with an eye toward ensuring sufficient returns and minimizing risk. Investment management has helped to position the Fund with a healthy balance of assets relative to liabilities.
“We’re fortunate to be fully funded with a 111% funding ratio” Mr. Guazo said.
The Fund is continuing to evolve, however, with plans to expand its quantitative analysis capabilities, which complement robust top-down and bottom-up investment approaches for its $95B+ portfolio, over 80% of which is actively managed.
“We will always maintain a fundamental and disciplined portfolio management approach,” Mr. Guazo added.
