“I am very concerned and alarmed at issues of financial integrity,” began Ranji Nagaswami, former Chief Investment Advisor to Mayor Bloomberg and the City of New York when asked about what institutional investors see as the important issues facing the buy-side.
Nagaswami spent over two decades successfully climbing the ranks of the investment management industry in the private sector. Then, in 2010, she took a job with Mayor Michael R. Bloomberg in the City of New York (NYC), where she would work on solutions to one of the administration’s biggest challenges: pension funding and managing investment risks of the NYC Retirement Systems’ $120 Billion plus in pension assets.
She was tasked with illuminating the administration and NYC Pension Board’s understanding of the drivers of the current pension crisis and successfully persuaded various stakeholders (with contentious mutual relationships to say the least), to restructure New York’s pension investments policy with an eye toward better balancing the long term risks. Having seen the buy-side from the unique vantage points of a manager and an institutional investor, she sees the need to change the tone of leadership in the investment industry as a whole as critical to furthering the interests of beneficiaries and shareholders – who, she says, “after all we are all in the industry to serve.”
“For over a decade now there have been deep issues surrounding our conduct as investment and financial services professionals. It is not just the conduct of the few who epitomized the worst behaviors during the accounting / insider trading / mortgage lending / leverage induced scandals, I am talking about all investors – research analysts, portfolio managers and financial advisors who bear our share of responsibility through our collective complacency in failing to enforce higher standards of due diligence and fiduciary behavior,” Nagaswami said. “We need to set a higher bar, a far more robust code of conduct for the asset management industry that sees improving end-investor outcomes as its ultimate mission. But to build a higher ethical culture we need leaders in the asset management industry who hold themselves accountable on this dimension. Thinking through standards to create accountability is deeply linked to the future of finance.”
“We need leaders who have the right values and prioritize integrity over asset gathering and profits.”
She added, “These may sound like easily said platitudes, but to many thoughtful investors it is very real and goes to the core of rebuilding confidence in the US financial system.” Nagaswami sits on the CFA Institute’s Asset Manager Code of Conduct Committee, but also uses her many public speaking opportunities to drive this issue home.