National Strategic Investment Dialogue

The guiding mission of the National Strategic Investment Dialogue (NSID) is to promote challenging and timely investment issues facing the investment community, and convene regional roundtable sessions to debate and discuss contrasting perspectives surrounding these issues. Each year the NSID focuses on a new agenda to be discussed throughout the upcoming year at multiple regional sessions. At the end of the year, the perspectives of each regional session are aggregated into a research paper summarizing the key themes and conclusions of the year-long program.

In 2004 we examined the challenge of managing assets in a period of diminished expected returns -- the gap between common investment return expectations based upon historical averages and forward-looking estimates of future returns.

The 2005 discussions focused on the changing state of the art in strategies for hedge fund investing -- the challenges and complexities associated with successfully harnessing the power of hedge funds to maximize returns and reduce key areas of risk.

In 2006 we talked about issues driving the sea change that is transforming the investment world -- from the basic theory of portfolio construction and asset allocation to the problematic language of investing; from the proliferation of hedging strategies to the concurrent emergence of new risks and unknowns associated with them.

In 2007 we discussed how our concepts of risk are changing and how we can alter our views to embrace and build upon the opportunities that greater understanding of risk can bring. Specific focus was placed on how investors can systematically identify the risks they face, including those hidden risks that are often overlooked and new sources that are emerging.

In 2008 we explored the central concept that we had entered a world in which traditional approaches to portfolio design, asset allocation, risk assessment, and strategy development had been overtaken by idiosyncratic needs. Today, it is not only possible to shape portfolios to the unique requirements of individual institutions, but it is a strategic imperative. Participants left with a more differentiated view of their own portfolios but also with a much richer sense of the options they had for tackling the core analytical and strategic functions associated with their jobs and professional missions.

In 2009, given the market shocks of the past year and the likely turbulence ahead, the meetings focused on the issues most on the minds of professional investors — questions about whether core values that guided them throughout their career had been overtaken by events or techniques that had served them well had grown obsolete, along with a focus on what had fundamentally changed about markets as a consequence of the current downturn, what changes were yet to come, and what such changes might mean. Just as importantly, the events identified what had not changed, what values and approaches ought to be defended and adhered to despite current or future conditions.

In 2010, as a result of the recent crisis and the levels of uncertainty that hover over the futures of all global markets, the meeting will put an emphasis on whether strategies recently applied may have gone wrong and whether traditional values ought to be applied. The discussions will go even further, addressing the core issue of what is the mission of professional investors and should it be more narrowly defined in ways that reduce risk and ensure core obligations can be met.