Review of Financial Markets: February 2020

The February issue of Review of Financial Markets features a look at impact investment versus ESG; a paper on investment for reliable income; an entertaining look at Gresham's Law; and more
Edited by George Littlejohn MCSI, senior adviser to the CISI


Impact measurement in private equity – cutting through the complexityJim Totty and Richard Burrett of Earth Capital consider the theory and practice of measuring impacts and outcomes from private equity investing, based on a 'whole life' scorecard approach.

As global capital markets embrace the urgent need for impact investing, private equity is at the forefront of this dramatic change. However, there is currently a wide range of bespoke approaches to impact measurement, and the lack of standard methodologies in private equity is hindering capital inflows. In this paper, the authors set out a straightforward framework for impact measurement in the private markets.

Earth Capital believes that a whole life scorecard is the approach that delivers consistent and robust impact measurement in private markets. It is easy and quick to implement in a ‘data-poor’ private equity environment, and allows comparison and aggregation across portfolios.

Rational income investing in a post-QE environment – let them eat cake

Doug Brodie CFP™ Chartered MCSI and colleagues from Master Adviser take a close look at the intricacies of generating income from cash pots in challenging times

A major challenge in wealth management and  financial advice today is advising clients on how to generate retirement or other long-term income where the objective is reliability of income, not capital growth. Determination of the risk profile of clients is a particular challenge in an increasingly tightly-regulated market – a theme which has been developed by Keith Robertson, Chartered FCSI, in recent editions of RoFM (Q3 2018 and July 2019). Here, Doug Brodie CFP™ Chartered MCSI and colleagues tackle the subject from a different angle in an excerpt from a thought-provoking paper on “rethinking risk and techniques for income investors, pension drawdown and trust investment in today’s markets.”

Read the full paper Holding senior managers in finance to account
As the Senior Managers & Certification Regime (SMCR) takes effect in the UK to bring much of the original Senior Managers Regime (SMR) into our sector, we take a look at the background to SMR through the perceptive and wise eyes of Dr Oonagh McDonald CBE, an international financial regulatory expert and former British MP and frontbench Treasury minister, now resident in Washington, DC. In her latest book, Holding bankers to account, she provides probably the most comprehensive account yet written of the scandals that emerged from the 2007 to 2008 financial crisis. In this excerpt, she probes the background to SMR and its development, and considers the important roles of independent directors, particularly the chair of the board and of the audit and risk committees. What is Gresham's Law and why does it matter?
Alderman Professor Michael Mainelli, Chartered FCSI(Hon) has made a special study over many years of the life and work of Sir Thomas Gresham, founder of the eponymous college and subject of a vibrant new biography by Tudor historian John Guy.

In this masterly overview of the origins and development of Gresham’s Law, he paints a vivid picture of the intellectual spirit and verve that has guided economics, the supposedly ‘dismal’ science,  over the centuries. 

Professor Mainelli has long been at the forefront of stimulating constructive debate around the City, not least in his role at Gresham College, and brings fresh and important present-day insights to conundrums of the past.

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  February 2020 edition 

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Published: 25 Feb 2020
  • Bonds
  • Fintech
  • Financial Planning
  • SMCR
  • impact measurement
  • Sir Thomas Gresham
  • RoFM
  • Review of Financial Markets
  • rational income investing

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