145: Why the Fed Can’t Forecast, How Zero Rates Were a Huge Mistake and is Nvidia’s $3tn*+ Valuation Sustainable? With Rob Arnott, Founder of Research Affiliates

Rob Arnott has published over 100 academic papers, co-authored several books, and his firm Research Affiliates developed the strategies behind approximately $147bn in AUM (as of March 2024). He has earned a reputation as a highly respected, value-orientated investor with clarity about unrealistic valuations, mean-reversion and where the investment opportunities may lie. In this interview he shares a timely analysis of Nvidia, which achieved a valuation of over $3tn last week (surpassing Microsoft as the world’s most valuable business). We thought it was timely to listen to his perspectives given today’s highly skewed, AI obsessed, passive-besotted investing world! Rob describes his approach to evaluating risks and returns, why he believes the US current fiscal path is unsustainable, and how his firm, Research Affiliates, have developed indices to allow investors to access more compelling opportunities. He unpicks his view as to why narratives around much-loved tech companies may already be reflected in their share prices, why the value opportunities are profound, especially outside of the US and particularly in emerging markets. Furthermore, he points out the disconnect between unloved value stocks and their underlying businesses (which have often been performing just fine).  Rob also discusses portfolio allocations today, building resilience in your portfolio to allow for geopolitical turbulence, and the asymmetry of owning US inflation-linked Treasuries (TIPS) vs straight treasuries. ​​The Money Maze Podcast is kindly sponsored by Schroders, IFM Investors and the World Gold Council. Sign up to our Newsletter | Follow us on LinkedIn | Watch on YouTube | *CNBC, June 2024

In a world where competitive survival has become rarer, one UK retail institution has survived for 175 years, remains a trusted brand, with over 50,000 employees, 2,000 stores and 4,000 pharmacists. Today Boots is part of the US Walgreens Boots Alliance, an entity with sales of $140 billion (2023/24) and one of the world’s largest purchasers of prescription drugs.  In this episode we aim to explore the future of retail, the big drivers of change, the overload of the health systems, how pharmacies may play a vital role, technology, data, and what customers really want. Seb James also discusses the demise of the department store, increasing specialisation, how data allows for tailoring of customer preferences and what AI might offer. He goes on to cover the notable rise in theft since COVID-19, the decline of the UK High Street, and how they’re competing with both the US tech giants and China-affiliated e-commerce challengers.  ​​The Money Maze Podcast is kindly sponsored by Schroders, IFM Investors and the World Gold Council. Sign up to our Newsletter | Follow us on LinkedIn | Watch on YouTube

Whether you’re a believer in the timelines, or sceptical about its urgency, the energy transition is underway, and its ramifications are immense. Both for the climate and for investors, the new order is challenging the old. In this conversation, Per Lekander, a veteran of the energy and utility space, discusses the failings of the wind and solar industries but also the opportunities which exist for investment. He evaluates competing energy sources, the rising temperature challenge, the runway ahead for electrification and the changes ahead for autos.  He expands on his negative view on Tesla, why Mercedes has such a technological edge, changes in battery technology and how he navigates the long and short worlds in his funds. Clean Energy Transition LLP is a thematic alternative investment management firm focused on fundamental equity investing across global long/short and long only investment strategies. Its funds were first launched by Partner, Portfolio Manager and CEO, Per Lekander, at Lansdowne Partners (UK) LLP in 2015. Today, the Firm manages c. US$2.7bn in assets for a diversified institutional client base, seeking to capitalise on the transformational changes occurring in the global energy sector, with a primary goal of delivering superior risk-adjusted returns.  ​​The Money Maze Podcast is kindly sponsored by Schroders, IFM Investors and the World Gold Council.  Sign up to our Newsletter | Follow us on LinkedIn | Watch on YouTube | *McKinsey Report, 2022

In this interview, we welcome the CEO of Novo Holdings, which manages the assets and wealth of the Novo Nordisk Foundation, one of the world’s largest enterprise foundations. Novo Holdings is part of the Novo Group, which also incorporates Novo Nordisk and Novonesis (who combined are responsible for much of Novo Holdings’ inflows). Novo Nordisk is a leading global healthcare company, founded in 1923 and headquartered in Denmark. Their purpose is to drive change to defeat serious chronic diseases, built upon their heritage in diabetes.  Novonesis, also part of Novo Group, serves 130 markets with enzymatic, microbial and advanced protein solutions. As of year-end 2023, Novo Holdings had total assets under management of €149bn (DKK 1,114 bn). In addition to managing a broad portfolio of equities, bonds & other assets, it also has a substantial allocation into life sciences.  In this illuminating discussion, Kasim shares Novo Holding’s asset allocation, their corporate structure, the European regulatory context, their long term mission and the importance of the foundation’s life-saving work. Kasim also covers balancing disbursements to the Novo Nordisk Foundation & re-investment in the fund, some criteria for working with external managers, their engaged ownership approach (especially in life sciences) and why they’re comfortable as a public firm. He also discusses the challenge of increasing antibiotic resistance, how biology is assisting in the green transition and the breathtaking development of medical research (including the revolutionary role of AI in diagnostics). ​​The Money Maze Podcast is kindly sponsored by Schroders, IFM Investors and the World Gold Council. Sign up to our Newsletter | Follow us on LinkedIn | Watch on YouTube

Research demonstrates that diverse companies outperform their less diverse peers. The 30% Club’s mission, led by Chairs and CEOs, is to increase gender diversity at board and executive committee levels.  In this episode, current 30% Club Global Chair Hanneke Smits, assesses the shifts underway to increase female representation across the corporate landscape, why PE lags public investing in this regard and what still needs to be done. She also reflects on working in both PE and public markets, the future trajectory of passive & active, and the challenges each presents to investors. She then discusses the qualities needed as a leader and mentor, including the difference between “being liked and being respected”.  ​​The Money Maze Podcast is kindly sponsored by Schroders, IFM Investors and the World Gold Council. Sign up to our Newsletter | Follow us on LinkedIn | Watch on YouTube

If you were asked ‘What is the London Stock Exchange Group, (LSEG)?’, most investors would answer, ‘the London Stock Exchange, of course.’ Yet, the correct answer would be, “well that’s only 5% of revenues today”, and then you might pause and wonder what the rest is… In this conversation with David Schwimmer, a veteran of Goldman Sachs, and CEO of the LSEG since 2018, we examine an organisation that today has revenues of £8bn, an operating income of £2.8bn and a market capitalisation of approximately £50bn. LSEG is the 14th largest company in the UK, employing 25,000 people in 70 countries, and is now 4% owned by Microsoft (as of May 2024).  David explains the LSEG business today, how they are the no.1 globally in real time financial data, how they serve customers in areas from risk-analytics, FX, bond trading, KYC, ALM verification. He discusses the partnership with Microsoft, and the rapid shifts in technology, as well as their impact on business execution and enhancing productivity. Finally we have an earnest conversation about the UK, which has the second largest pension market in the world, London’s enviable position, and why persistent negative press around delisting may have created a stronger narrative than the facts would suggest. ​​The Money Maze Podcast is kindly sponsored by Schroders, IFM Investors and the World Gold Council. Sign up to our Newsletter | Follow us on LinkedIn | Watch on YouTube

Armed with a degree, MBA, MPA, and a PhD, the author of 5 bestselling books, a trained economist, a previous employee of Goldmans Sachs, a life peerage in the House of Lords, sought after board member, one of Time Magazine’s 100 Most Influential People in the World, and on Oprah Winfrey’s “O” Power List, our guest today seems to have it all! Dambisa Moyo has written about why development aid to Africa isn’t working, the economic vulnerability of the West, China’s single minded-focus, why democracies are under threat, and how company boards can work more effectively.  In this conversation we laser in on her assessment of developed markets’ economic growth, or lack thereof, and where she sees the investment opportunities. She discusses where the UK and Germany are failing, why excessive regulation is a problem, how she weighs up bonds versus stocks, EM versus DM equities.  She also covers why Warren Buffett may be spot on with his energy investments, and how the US economic boom masks a more stagnant picture in emerging markets (home to 90% of the world population).  She finishes with some fabulous advice for young people: “No doesn’t mean never!” ​​The Money Maze Podcast is kindly sponsored by Schroders, IFM Investors and the World Gold Council. Sign up to our Newsletter | Follow us on LinkedIn | Watch on YouTube

Through direct, entertaining & insightful interviews with masters of the real life money maze, we hope to learn about different approaches to allocating capital, making business decisions and navigating the pitfalls that line the paths to prosperity.  Each episode, with invite leading figures from the investment management and finance sector onto the show, who share their investment insights and career tips with our community. We're driven by a commitment to opening up the industry, which can often be shrouded in the fog of jargon and apparent complexity.  To provide listeners with a wider perspective, we also occasionally feature guests from the arts or wider business world. The interviews is available completely free on all major podcast apps, on YouTube and via www.moneymazepodcast.com If you have any questions or guest ideas, feel free to email us at [email protected]. Sign up to our newsletter for more in-depth insights | Follow us on LinkedIn ​​The Money Maze Podcast is kindly sponsored by Schroders, IFM Investors and the World Gold Council.

Back in September 2021, we met with Nic Cary of Blockchain.com, which was already well on its way to becoming one of the world’s leading digital asset platforms.  Since then cryptocurrency volatility has been extraordinary, and witness to wild gyrations, the imprisonment Sam Bankman-Fried, SEC action, regulatory hand wringing and then this year, BlackRock’s launch of one of several crypto ETFs (approved by the SEC), and Bitcoin's halving last weekend. In this conversation Nic makes the case for crypto to a sceptical Simon, discussing the importance of blockchain technology, the growth of the crypto markets, scarcity, risk, speculation, institutional versus retail participation, and of course, the merits of gold vs crypto. Blockchain has now grown to be one of the world’s largest crypto infrastructure providers, enabling both institutions and individuals to buy, sell, utilise, understand and exchange crypto products. Since being co-founded by Nic in 2011, they’ve facilitated about a third of all bitcoin network transactions, processing over $1tn in transaction volume for 37m users. Also joining this conversation was Will Campion of Campion Capital (who set up the podcast with Simon), making his debut appearance on the show! ​​The Money Maze Podcast is kindly sponsored by Schroders, and IFM Investors.  Sign up to our Newsletter | Follow us on LinkedIn | Watch on YouTube

In this interview, we return to Canada. Having interviewed Jo Taylor of OTPP last year, this time we sought out one of the most well-known and successful women in private equity, someone who is also proving to be a huge role model for young women pursuing careers in the investment industry.  Suyi Kim, educated at the University of Seoul and then Stanford, explains the attraction PE had for her as she pivoted from consultancy. She discusses sourcing the deals, when they entered and exited Alibaba, the differences in the opportunities in PE investing across continents, and importantly, how they approach China.  She discusses how PE has changed, why it remains a bottom-up process, the potential for high returns, and why it is an attractive business for young people to consider. Finally; she shares her two most important words: “Be Curious”! ​​The Money Maze Podcast is kindly sponsored by Schroders and IFM Investors Sign up to our Newsletter | Follow us on LinkedIn | Watch on YouTube