Hi, I'm Andrew Sweeney, Managing Director and Institutional Portfolio Manager at PH&N Institutional, and I'm glad you're able to join us. Today we're going to do a walk back; we're going to look back the last 25 years, first quarter century of the 21st century. We're going to look at the themes that shaped institutional portfolios. Now, before we dive in, maybe close your eyes and imagine it's 1999. You're biting your nails, wondering whether your computer will turn on tomorrow.

At that moment, if I told you what the next 25 years would bring from an investment perspective, I'm not sure you would believe me. Passive investing was just a niche strategy. Private equity was still called leveraged buy-outs, and private debt pretty much didn't really exist in 1999. And the idea that we would have negative interest rates, that's just impossible.

Now fast forward to today, and passive is the majority of investments in some markets, privates are among the largest and fastest-growing allocations for institutional Portfolios, and we saw and survived those negative interest rates. So, what happened? Well, that's the story we're going to tell today. Not just what happened, but why it happened and what it means for your portfolio as you navigate the next quarter century of investing.

We will explore four major themes that reshaped institutional portfolios, the powerful forces that drove those changes, and the critical questions you should be asking as a fiduciary, looking ahead.

So let's start with this walk down memory lane. Now, while we were all worried about whether our computers were going to survive midnight, the Y2K bug, here's what the world actually looked like in the early 2000s.

Cutting edge technology from that time was a USB key and the amazing BlackBerry 957, which allowed you to have email in your pocket for the very first time. Now, Netflix was still mailing you DVDs through the mail. Survivor more or less created reality TV. The first episode of survivor was in was in 2000, we're now at the 50th season. And when it comes to sports, some things change, some things don't change. Those Toronto Maple Leafs struggled back then, and unfortunately they're still struggling to this day.

Now, it really has been an eventful quarter century. If we look at some of the major factors that happened, the very beginning of the century was the collapse of the tech bubble, which marked really the beginning of the end for Nortel. At its peak in 2000, Nortel represented over a third of the TSX market cap. It actually peaked at 35% of the market.

And this is a concentration risk that taught Canadian investors a very, very painful lesson about diversification. 2001 saw 9/11, which led to 20 years of wars in Iraq and Afghanistan. 2001 also saw China join the World Trade Organization, of which we still see the impact on manufacturing and trade policy to this day. Now, while we all remember the global financial crisis of 2008, where toxic U.S. subprime mortgages almost brought down the entire global financial system, many of you have probably forgotten that Canada had its own issues in 2007 with the non-bank, asset backed commercial paper, or ABCP crisis, that occurred in 2007.

Now, euro banknotes started circulating in 2002, and within a decade, the Europeans had a debt crisis. There was an acronym coined at the time called PIGS. That was Portugal, Italy, Greece, and Spain. At the peak of that crisis in 2012, Greek ten-year bonds yielded more than 30%, and serious economists actually debated whether the eurozone would survive.

2015 saw the Paris climate accord. A year later, the UK voted for Brexit. 2020, I don't need to remind everyone we saw the COVID-19 pandemic, and at the end of 2022, we saw the launch of ChatGPT, which was a catalyst for the AI boom that, well, is something we can't stop talking about today.

Now, the last 25 years really have been a long and winding road. As eventful as the last quarter century has been, it's been a good period for investors with major equity markets performing quite well over this time period. Now that we're going to put a pop quiz in here for you, take a moment. You can see these four different equity indices – Canada, U.S., emerging markets, and EAFE. Guess which one of them outperformed over the last 25 years?

Well, it's kind of a trick question. I think most people would have guessed the U.S., but I think the thing that would surprise you is that the TSX only lagged the U.S., the S&P 500, by ten basis points a year over the last 25 years, and the emerging market index was only a further 20 basis points behind.

The real laggard was the EAFE index, which lagged by, you know, hundreds of basis points. Now, what people forget is that in the early 2000, the U.S. lagged while Canada and EM led. They led the way driven by the commodity supercycle that we saw that lasted until about the 2008 crisis. EAFE lagged, you can see EAFE actually tracked the U.S. market to about 2012, and then after the euro crisis, Europe really lagged, while the U.S. went on to the leadership, to be the best performing market over the last 25 years.

Those are public markets. Now let's look at private markets and fixed income. And you can see the stars of the show in private markets, where infrastructure and private equity, both up well into the double digits. Real estate did better than I think most people anticipate. It was up 8% over the time period, and it really shows you how well it performed before the recent period, where I think in recent memory, real estate's really been a struggle and something people have some concerns about.

And even fixed income is only up 4.2%, but that's a fully 2% real return ahead of inflation. And so fixed income actually did the role that it was supposed to play, and it provided crucial ballast during equity drawdowns, and it allowed for critical rebalancing opportunities. So, those were the returns. Let's go back and look at institutional portfolios in 1999.

And a great way to think about the events of the last 25 years is through the lens of that asset allocation. And so if we look at the, this is the typical defined benefit mix from 1999. The reason we use defined benefit pensions is that's actually where we have really good data. And you can see that this 1999 portfolio looks pretty traditional, with fixed income and Canadian equities making up nearly two thirds of the asset mix, and if you look closely, you'll see a couple things that jump out.

One, really modest allocation to alternatives, about 5%. A regional approach to foreign equities – so U.S. and EAFE rather than global,  and a significant home country bias. So 95% of this portfolio was in public markets. And amazingly, 31% was invested in Canadian equities. Canadian equities was the second-largest component of that portfolio.

And notably, we don't see any infrastructure or private debt exposure in this portfolio.

Now fast forward to today. Portfolios have evolved as markets have evolved. So here we're showing the 1999, the same portfolio from the previous slide, and next to it we show a current portfolio for 2025.

We've seen an increased number of asset classes, and a much more complex and sophisticated portfolio. The biggest single change was a reduction in Canadian equities, down 28%, representing only 3% of the portfolio today. This reduction in Canadian equities partially funded an even larger increase in private assets, which are up to 43% from only 5% in 1999. And we look at the components of those private assets, infrastructure and real estate saw the largest increases, up 11% each, followed by private equity, up nine. and private debt, up eight. Interestingly, hedge funds remain relatively modest and only a 4% allocation.

So we've seen some pretty significant changes in the portfolios. So, there's many themes that impacted markets over this time. We're going to dive into four key themes that drove changes in those portfolios. Those themes include the growth of passive investing, particularly in equities. The evolution of quantitative investing, the rise of private markets, and the decline of home country bias.

We'll also touch on some of the forces that influenced markets and investors over the last 25 years, including the impact of interest rates, regulation, and technology.

So let's dive into these themes, starting with the growth in passive. Now there's approximately $19 trillion of assets managed passively globally today. The U.S. market has led this trend; it's estimated that 55% of U.S. mutual funds and ETFs are managed passively. Now, this trend is not as pronounced in other markets. It's estimated for EAFE, that number is closer to 30%. And for Canada, it's really only about 20% passive. Now this rise of passive has had some knock-on effects.

So among S&P 500 companies, passive holders now own more than 20% of the shares. Now, this explains the rise and the political pushback of the proxy advisory firms that passive managers rely on to conduct their proxy voting. This concentration of voting power among these few proxy voting firms sparked debates about outsourcing corporate governance and even anti-trust concerns. The other big change is how asset owners think of passive. Previously, people were in one camp or the other – you either believed in passive, or you believed in active.

Well today it's not unusual to see a mix of active and passive equities in a portfolio; passive is a very effective way to get an inexpensive exposure to a market. Now we get lots of questions from clients about passive, but we've seen fairly limited activity so far. However, the hottest topic in this area is around the recent underperformance of active managers in general.

Now, we'd argue that this underperformance is not from markets getting increasingly efficient, but instead it's caused by the rapid increase in market concentration, which tends to be correlated with struggles in active management. This happened during the late-90s internet bubble, on the left hand side of this chart, where active managers struggled. But you can see it quickly reversed in 2000, and resulted in ten solid years of active managers outperforming. And we’ve seen recently with the mag seven stocks dominating returns, it becomes mathematically difficult for diversified active managers to outperform market cap weighted benchmarks. But if history is any indication of the future, this concentration eventually unwinds, and when it does, active managers typically end up on top. So this too shall pass.

Now, the one style of active management that's performed well of late, is quantitative investing. Now, quant investors follow a systematic approach that uses mathematical models, data analysis, and computing power to identify investment opportunities.

Contrast this with a fundamental manager who might do a weekly meet with management teams, reading financial statements and making some qualitative judgments about a company.

Now, unsurprisingly, like the rest of markets, quant managers have not stood still over the last 25 years. It's been a significant evolution in quant investing.

It started out with factor investing and smart beta in the early 2000. This involved mostly analyzing existing quantitative financial and market data. So this was data that existed, it was just running it through a computer. Things like price-to-book ratios, momentum, earnings quality.

Now by the 2010s, we'd seen the rise of natural language processing to help quant investors analyze news and sentiment data and begin the process of looking at non-traditional data, which is still used today. Examples of this alternative data might be looking at weather patterns to forecast agricultural yields, or even monitoring social media to predict the next meme stock. Now, more recently, quant investors have added massive computing power to use generative AI and large language models to gain an edge. These models can process earnings, call transcripts, regulatory filings, and news articles in real time at a scale to detect subtle shifts in sentiment, and identify early warnings that human analysts might miss.

Now, we feel like we've only scratched the surface with these technologies, and we’ll be still talking about them well into the future.

Now looking forward, the one wild card is quantum computing, which simply put, is a computer that can explore millions of solutions simultaneously rather than one at a time, like current computers. Now, quantum computing has been proven conceptually, but it hasn't yet been scalable in the real world. If it does achieve practical viability, it could revolutionize portfolio optimization and risk modelling by solving complex calculations in seconds rather than what might take months or years.

Now, one of the biggest forces that shaped capital markets over the last 25 years – well, over the last 20 of the 25 years – was the decline we saw in interest rates.

This, of course, was a continuation of a trend that started 20 years earlier, in the early 1980s. As inflation was benign, and the benefits of globalization spread through the economy, rates remained low through most of the period.

The entry of China and Eastern Europe into the global trading system essentially doubled the global labour force, creating powerful disinflationary pressures.

With every crisis, it seems that rates hit new lows. In fact, there was a time after the euro crisis, where there was something like more than $15 trillion, with a T, of bonds that had negative yields. I know, it's hard to believe. As rates were so low, central banks actually had to broaden the arsenal of tools they were using to include something called quantitative easing, which is basically just a fancy word for saying they bought bonds in the open market to try and bring down rates and stimulate the economy.

Now, at the peak, the U.S. Federal Reserve's balance sheet reached $9 trillion, which was ten times its size from pre-financial crisis levels.

Now, it took the resurgence of inflation after COVID to finally send yields up over the last few years. And it looks like the years of declining rates are likely behind us. The debate over what direction rates go next is the big one everybody talks about, but the consensus suggests that we're in sort of a higher-for-longer, that the rates we’re at seem likely to continue in the foreseeable future.

Now, this trend of declining rates that we saw through most of this period had the very predictable knock-on effect of investors moving into riskier assets in search of yield. They needed return. They weren't getting it here. They had to step out on the risk curve.

Now, we saw this manifest itself in the early 2000 as investors piled into low-risk U.S. residential mortgage-backed securities. After all, what could be less risky than lending against American homes, an asset class that supposedly had never declined, ever, on a national basis? Well, turns out that lowering lending standards results in credit losses, credit losses big enough to create the great global financial crisis of 2008, which toppled Wall Street and resulted in the collapse of Bear Stearns and Lehman Brothers.

The GFC, as we now call it, resulted in significant regulatory reform to rein in risk taking among banks. The biggest reform in the U.S. was something called the Volcker Rule, which was part of the Dodd-Frank act. This restricted banks’ ability to take risk, both in terms of leverage and the types of loans they could make. Globally, the Basel III capital requirements achieved very much the same sort of thing.

Now, you never thought we'd be quoting Isaac Newton, but here we are. Isaac Newton had the third law of motion. Of course, everyone remembers that – it's that every action has an equal and opposite reaction

So meaning risky loans – which the banks could no longer make – they didn't cease to exist, they just migrated to other parts of the market. Now, what we used to call – we used to call it a very sinister-sounding “shadow banking system” – we now just call that private debt, maybe even leveraged loans.

Now if you go back to 2010, but all the way back to 2000, but back to 2010, the high yield market was larger than the private debt and leveraged loan markets combined. But after significant growth over the last 15 years, each of the private debt and the leveraged loan markets are now bigger than the high yield market. So although regulations made banks less risky, leveraged borrowers found no shortage of lenders. As they say, where there's a will, there's a way.

Now, perhaps the most interesting wrinkle in all of this is that the high yield market over the last 25 years has become less risky, not more risky, less risky. Because what's happened is lower-rated borrowers have migrated down to the private debt and leveraged loan markets. And you can see from the credit rating breakdown on the right-hand side that, amazingly, 62% of the high yield market today is now rated BB or above, up from only 35% at the beginning of the century. And you can see that leveraged loans are literally the mirror image.

Now, private debt has become an established asset class, with many of you having allocations in your portfolios. The big question that investors wonder is how it performs during a downturn, given that the asset class, as it stands, has never gone through a recession.

Now that search for yield didn't just impact private markets, we also saw it in more traditional fixed income too. Investors first migrated to larger Canadian or domestic investment grade corporate allocations. They bought more corporate bonds to get yield. Then they slowly migrated into things like high yield bonds and mortgages to get a little more yield at the margin. Investors then began to look outside of Canada for fixed income, seeking diversification in things like global investment grade and then larger high yield allocations and eventually the addition of things like emerging market debt.

Some clients did these allocations a la carte, but most moved from solutions like a vanilla bond fund or corp strategy, to something like a corp plus strategy that had much greater exposure to different types of credit and higher yields.

Now, more recently, clients have embraced standalone public market credit allocations. This has resulted in what we call multi-asset credit, or MAC for short, becoming much more popular. So a MAC strategy includes a range of different credits, including high yield emerging market debt plus bank loans, structured credit, distressed debt, convertible bonds. Think of all the different sources of credits that you might call a plus strategy, and put them all into a single fund. The appeal here is that skilled managers can dynamically allocate across the credit spectrum, potentially enhancing returns while managing risk through diversification.

Now, the migration of investors from public to private didn't just happen in debt markets. We saw a significant rise in private equity over the last 25 years, too. Now, to understand the forces that drove this, we need to go all the way back to the bankruptcies, the accounting scandals of WorldCom and Enron at the tail end of the internet bubble.

Now, WorldCom CEO, Canadian Bernie Ebbers from Edmonton, ended up serving 15 years in prison before he passed in the year 2020. And Enron's CFO, Andy Fastow, was named CFO of the year in 1999, before he served five years in prison.

Now, Fastow’s specialty was the creation of off-balance-sheet entities that kept debt also Enron's balance sheet. Also turns out Fastow was a bit of a Star Wars nut, and so these off-balance-sheet entities or special purpose vehicles, SPVs, kind of had cool names like Jedi, Zuko, Raptor. Now, if we fast forward to today, it's hard not to think that Meta, or Facebook's, recent off-balance-sheet data centre deal was inspired by this, too.

So this was a data centre in Louisiana called Hyperion, and the off-balance-sheet SPV that Meta created to house this asset off their balance sheet was called Beignet, or Beignet Investor. Now, that roughly translates into donuts in English. You know, not sure, maybe something could potentially go wrong here.

Now, going back to Newton's third law, the reaction of these scandals was another form of regulation, something known as Sarbanes-Oxley or SOX for short. Now, for those of you who worked in the accounting profession, the joke there was that it was called the CPA Full Employment Act, because it created so much work for the accounting industry when it was implemented.

Now, the goal of Sarbanes-Oxley was to make public markets safer and more transparent, but it also served to supercharge private equity as the cost and administrative burden of being public rose, such that many fewer companies IPO. You can see in the middle the number of publicly listed companies fell by approximately 50% in the 20 years since the passage of SOX. Now, as we showed at the outset, the returns to private equity have been really strong for the last 25 years. Though, industry conditions have really deteriorated since interest rates rose in about the year 2022.

Now, this can be seen on the right-hand side from the decline in sales of PE backed companies, also known as exits. Exit activity fell nearly 50% from 2021 levels, creating a bottleneck in the private equity cycle. This has resulted in all sorts of liquidity issues for investors or LPs, and is the topic of one of our other presentations on illiquidity.

Now, the response to this has been that private equity sponsors or GP's have been launching continuation funds, and the LPs, investors, have been forced to sell their shares in the secondary market at discounted prices in order to get liquidity. Now, looking forward, there's growing consensus that while the best days of PE are not necessarily behind us, the easy financial engineering and low interest rates is probably behind them. And that success here is going to depend on genuine operational improvements rather than just buying things cheap, levering them up, and selling them at a higher multiple a few years later.

Now, for U.S. institutions, their biggest alternative allocations have been private equity and hedge funds, while for Canadians it's actually been quite different, it's predominantly been real estate and infrastructure. Now, real estate was the first allocation for most Canadian plans. In fact, the biggest plans in Canada didn't just invest in real estate funds, they actually bought entire real estate operating companies with Ontario Teachers Pension Plan buying Cadillac Fairview, and Omers buying Oxford near the turn of the century.

The next port of call for many plans was into infrastructure, which added compelling returns, diversification, downside protection, and was typically a good hedge against inflation. Now, while much of the initial real estate investment was in Canada and people only went global subsequent to that, infrastructure is mostly global right from the outset. This is because many of the infrastructure assets in Canada are out of reach for investors, as they remain in government hands.

Now, this is in stark contrast to the rest of the world. Pension plans and investors own airports, electrical transmission, local utilities, and other infrastructure assets.

Now going forward, we see both asset classes playing a really important role in client portfolios. Some of the themes we see are converging asset classes where, you know, things like data centres, are really a blend of both real estate and infrastructure. If you think about a data center requires significant power, sophisticated cooling, and network connectivity. So in a sense, they're infrastructure assets sitting inside a real estate structure. We see evolving ownership models that involve not just outright sales of assets, but concessions, where an investor controls and operates an asset for a number of years, but ownership ultimately goes back to the government. For example, Vancouver's Canada Line subway, which goes out to the YVR airport, operates under a 35 year concession with a couple of large Canadian pension plans.

Now, with asset rich governments around the world grappling with high debt levels, we see expanded opportunities for more of these assets to potentially end up in private hands. Institutional investors can provide significant capital to governments, and with their long time horizons, they're actually well suited to own and manage these kinds of infrastructure assets.

Now, this expanded opportunity brings us back to Canada, Canada 2.0. The Carney government has a renewed focus on economic development and recognizes that Canada hasn't been a place where it's been easy to get large projects done, and global capital hasn't always felt welcome in Canada.

The government launched the Major Projects Office with a goal of fast tracking projects that are deemed in the national interest. These projects, and others on the drawing board, exceed $1 trillion of anticipated investment. There's some big numbers here.

Now, based on our track record of completing infrastructure projects, this might seem far fetched. But Canada's got a history of nation building developments. This includes the original Canadian Pacific, our CP rail, which was launched in part to encourage the colony of British Columbia to join Canadian Confederation, all in the face of U.S. expansionism. The U.S. Secretary of State at the time said, “The whole North American continent shall be sooner or later within the magic circle of the American Union.” So there was pressure from the outside.

Now, after four years, the last spike was nailed and the transcontinental railway knit Canada together. Now the example is 150 years old, granted, but it was in the face of a foreign threat, and it shows what we can do. And so hopefully, we've done it before, we can do it again.

Now, in order for us to be successful, a number of things need to happen. We need to streamline bottlenecks to get things built while protecting the environment. We need to broaden the investor pool to get more capital invested in Canada. Now that said, for many investors, these projects are beyond their risk tolerance, so the federal government might play a role here by potentially privatizing assets. Privatizing existing infrastructure assets.

Now, privatization was a big trend in the 1990s when the federal government privatized a number of Crown corporations, including Air Canada, Petro Canada, and CN rail. They can do the same sort of thing today with government-owned infrastructure and use those proceeds to help de-risk new projects. I imagine there would be significant appetite among investors like yourselves to own Canadian airports, Canadian power generation, Canadian electrical transmission.

Call me an optimist. Canada 2.0 could very well happen on our watch, and we could be part of financing it.

Now, the last major theme we want to touch on is the decline in home country bias among Canadian institutional investors. Now, most of you know that when you look at, whether it's debt or equity markets, Canada represents only about 3.5% of global markets.

Now, if we go back in the time machine, starting in 1971, pension plans were only allowed to hold 10% of their assets outside of Canada, i.e., 90% within Canada. These foreign content limits, they remained in place, they progressively loosened in the 1990s, 10 became 20, then the 20202, 20 became 30, and then finally in 2005, they were repealed entirely.

Now, this regulatory change resulted in most of your portfolios evolving quite significantly. We showed how Canadian equities fell from over 30% of portfolios to less than 5% over this time period. This change also resulted in non-domestic investments in credit, real estate, infrastructure, and private equity.

Much of this also happened against a backdrop where Canadian GDP per capita flatlined for a decade, and Canadian productivity lagged our neighbor to the south, creating a strong economic rationale for this diversification.

Now, while all of us have a duty to maximize Risk-adjusted returns in our portfolios, we wonder whether the next 25 years may see better investment opportunities in Canada that might lead to some repatriation of capital, maybe to Canadian stocks, maybe to the potential infrastructure opportunity that we mentioned on the previous slide.

Now let's revisit those portfolios we showed at the outset. We highlighted four major themes that influenced the evolution of the portfolios. Now look at the impact – let's look at the impact of those changes had on risk.

Now it's tricky to show returns for the portfolios as the mix evolved over a very long period of time. But we can show the beginning and ending risk profiles. Here we can see that reducing home country bias, adding private market allocations to real estate, infrastructure, private equity, private debt resulted in a much lower risk portfolio.

The risk reduction came from a number of different places. It came from geographic diversification that reduced country-specific risk. Private assets, of course, exhibit lower volatility, though we should acknowledge that this is partly due to appraisal-based valuations rather than market pricing. And part of it came from the broader diversification across a broader range of asset classes, which reduced correlation during market stress. We also know that the last 25 years were good for plan funded status. So we feel comfortable in concluding that all these moves made a significant amount of sense.

Now, we've looked back through the rearview mirror at the last 25 years through the lens of changing portfolios. But what do the next 25 years look like? Well, as the saying goes, predictions are hard, especially about the future.

But there's some key questions you should consider as you position your portfolio going forward. Now, for the better part of the last 25 years, declining interest rates was the tide that lifted all boats. Bonds delivered strong returns, equity valuations expanded as discount rates fell, and real assets benefitted from cheap financing.

In many ways, it was the golden age for balanced portfolios. But that era’s likely ended. Deglobalization, demographic changes, and persistent fiscal deficits all point towards potentially higher Inflation. This suggests that interest rates will be more of a headwind going forward, as it's likely that we're in this higher-for-longer rate environment.

Now, private debt grew from nothing to trillions of dollars, fuelled by retreating banks and low rates. But now we're seeing compressed interest rate or compressed credit spreads, we’re seeing looser covenants, and we're seeing a maturity wall coming due in the next two years. That's really going to test credit quality. Now private debt remains important, growth will moderate.

It's important to shift your focus from rapid allocation, like trying to get exposure to this asset class, to really thinking about rigorous manager selection. Defaults inevitably are going to rise, and that's when manager skill is really going to matter the most.

Now we've discussed that active managers have struggled of late. We think this is largely due to market concentration as opposed to active management no longer having a place in the markets. That said, AI will democratize the easy alpha and likely separate winners from losers in active management. How active managers leverage this technology going forward may be the determinant of who rises to the top.

Now, real estate used to mean offices and malls. New categories of real estate include self-storage, because we all have too much stuff, land lease communities, which bring down the cost of homeownership, and even data centres have a real estate element.

As for infrastructure, that continues to evolve, with data centres, digital infrastructure like wireless towers, network backhaul, all are now part of the mix, in addition to more traditional things like toll roads, airports, and other things you're familiar with.

Our best guess is that new sub-asset classes will be defined by technology transformation, climate adaptation, and aging demographics.

Now, it's fair to say the next 25 years won't resemble the last. Easy market returns are likely behind us, and success going forward will be determined by your ability to adapt to structural shifts, your discipline and manager selection, and your willingness to allocate capital to where the world is going rather than where the world has been.

So let's maybe wrap up and talk about what this means for you as a fiduciary for your plan or foundation or endowment that you're overseeing.

Now, markets evolve. They've always evolved, they will continue to evolve. This evolution brings new opportunities and risks. And it begs the question, do you have enough flexibility and expertise to adapt to these changes?

Governance structures that worked 25 years ago are not likely to work today, so consider whether your investment policy statement and your decision-making processes allow you to move at the speed that’s required in today's environment.

Now, as we've learned, regulations always end up having unintended consequences. Can you avoid the risks and benefit from the opportunities that emerge? Those who understood that past regulations would create opportunities in private markets gained first mover advantage. What's the next regulatory shift that you should be preparing for?

As markets evolve the fact is, portfolios are only likely to get even more complex. Does your committee have sufficiently broad skills to navigate this complexity? Consider whether you have specialized expertise in areas like real estate, infrastructure, quantitative investing.

And lastly, admitting that it's impossible to know everything. Make sure you understand that leveraging partners and drawing on outside expertise is a very valuable way to operate. The most successful institutional investors that we see don't try to do everything in-house. They're thoughtful about their core competencies and strategic about where they partner, whether that's with managers like ourselves or potentially with consultants, or finding people in the community to join their committee.

Now, the next 25 years will bring changes that we can't predict. But by understanding how we got here, by building adaptable governance and investment frameworks, you could position your plan to thrive through whatever comes next. Thank you very much for your time. Have a great day.