Discussion

0:00

S… Speaker 1 (Discussion)

Very good morning.

0:01

S… Speaker 1 (Discussion)

My name is Jigdel Sinke and it is my immense privilege

0:05

S… Speaker 1 (Discussion)

to open the conversations for the first Asia Visionary Summit.

0:08

S… Speaker 1 (Discussion)

Our first guest has done something quite extraordinary that

0:13

S… Speaker 1 (Discussion)

very few people in the world has done.

0:15

S… Speaker 1 (Discussion)

He's managed $1 .5 trillion with the

0:19

S… Speaker 1 (Discussion)

100 -year investment horizon.

0:21

S… Speaker 1 (Discussion)

For five years,

0:23

S… Speaker 1 (Discussion)

Hiro Mizuno was the Chief Investment Officer.

0:28

S… Speaker 1 (Discussion)

of Japan's Government Pension Investment Fund,

0:30

S… Speaker 1 (Discussion)

or GPIF for short.

0:32

S… Speaker 1 (Discussion)

At the time,

0:33

S… Speaker 1 (Discussion)

it was the largest pension fund in the world.

0:35

S… Speaker 1 (Discussion)

He managed pension reserves on behalf of tens of millions

0:39

S… Speaker 1 (Discussion)

of people, with the responsibility extending to generations not yet

0:43

S… Speaker 1 (Discussion)

one. He used their position to change how the world's

0:47

S… Speaker 1 (Discussion)

biggest investors think about their responsibility,

0:50

S… Speaker 1 (Discussion)

pioneering the application of universal ownership and

0:54

S… Speaker 1 (Discussion)

cross -generational investing.

0:56

S… Speaker 1 (Discussion)

The idea that large investors must consider the long -term health

1:01

S… Speaker 1 (Discussion)

of the entire economy,

1:02

S… Speaker 1 (Discussion)

society and planet.

1:04

S… Speaker 1 (Discussion)

He then served as the UN Secretary -General's Special

1:08

S… Speaker 1 (Discussion)

Envoy on Innovative Finance and Sustainable Investments and

1:12

S… Speaker 1 (Discussion)

as a board member of Tesla.

1:14

S… Speaker 1 (Discussion)

Today,

1:16

S… Speaker 1 (Discussion)

he is a Senior Advisor to the Task Force on Nature -Related Financial

1:21

S… Speaker 1 (Discussion)

Disclosures and a member of Planetary Guardians and other international

1:25

S… Speaker 1 (Discussion)

initiatives.

1:27

S… Speaker 1 (Discussion)

His career has been unconventional,

1:28

S… Speaker 1 (Discussion)

but one principle has remained constant,

1:31

S… Speaker 1 (Discussion)

doing what is right for future generations.

1:34

S… Speaker 1 (Discussion)

He has been one of the world's leading advocates for

1:38

S… Speaker 1 (Discussion)

sustainable economic development and patient capital,

1:41

S… Speaker 1 (Discussion)

the kind of long -term thinking needed to build enlightened prosperity.

1:45

S… Speaker 1 (Discussion)

Few people are better placed to tell us why Asia must

1:49

S… Speaker 1 (Discussion)

think differently.

1:49

S… Speaker 1 (Discussion)

Please join me in welcoming Giro Mizuno.

1:52

S… Speaker 2 (Discussion)

Your

2:04

S… Speaker 2 (Discussion)

Excellency Minister and the English guest.

2:08

S… Speaker 2 (Discussion)

and the team of Asian Visionary Summit.

2:11

S… Speaker 2 (Discussion)

It's my honor to visit Bhutan Mumbai for my first

2:15

S… Speaker 2 (Discussion)

time and be able to share some of my thoughts and

2:19

S… Speaker 2 (Discussion)

most of the other challenges I've gone through trying to promote the long

2:23

S… Speaker 2 (Discussion)

-term sustainability into

2:28

S… Speaker 2 (Discussion)

the capital market.

2:29

S… Speaker 2 (Discussion)

So I'm quite excited to be a part of this conversation.

2:33

S… Speaker 2 (Discussion)

Just to be honest,

2:35

S… Speaker 2 (Discussion)

listen to the

2:39

S… Speaker 2 (Discussion)

Honourable Prime Minister's speech,

2:40

S… Speaker 2 (Discussion)

I think the Prime Minister you covered most of the points.

2:44

S… Speaker 2 (Discussion)

So I probably just ended up confirming

2:48

S… Speaker 2 (Discussion)

some of the points out of

2:55

S… Speaker 3 (Discussion)

this. Thank

2:59

S… Speaker 1 (Discussion)

you, Hiro -san.

3:00

S… Speaker 1 (Discussion)

Our conversation today makes a rather bold claim that Asia must

3:04

S… Speaker 1 (Discussion)

take in centuries.

3:04

S… Speaker 1 (Discussion)

Perhaps we can start by talking about your time at the Japan pension fund.

3:09

S… Speaker 1 (Discussion)

What did you learn about the responsibility of investing on behalf

3:13

S… Speaker 1 (Discussion)

of future generations?

3:16

S… Speaker 2 (Discussion)

Sure, I learned many many things when I was running

3:20

S… Speaker 2 (Discussion)

the GPIF.

3:21

S… Speaker 2 (Discussion)

First of all,

3:22

S… Speaker 2 (Discussion)

running a big venture fund comes with a lot of the

3:26

S… Speaker 2 (Discussion)

political consequences and

3:31

S… Speaker 2 (Discussion)

also the need to deal with the how uneducated

3:38

S… Speaker 2 (Discussion)

in the way of the financial education the general public

3:42

S… Speaker 4 (Discussion)

to understand.

3:44

S… Speaker 2 (Discussion)

how what i'm trying to achieve so all those kind of things comes with a lot of challenges but

3:48

S… Speaker 2 (Discussion)

if i choose like a two major so like a learning or in

3:53

S… Speaker 2 (Discussion)

a way finding throughout my gprf work is

3:57

S… Speaker 2 (Discussion)

one is even the biggest and the longest term

4:01

S… Speaker 2 (Discussion)

investor like a government pension investment fund gprf cannot

4:06

S… Speaker 2 (Discussion)

operate as a patient capital investor

4:10

S… Speaker 2 (Discussion)

i'll tell you why the one is

4:15

S… Speaker 2 (Discussion)

As you probably see,

4:16

S… Speaker 2 (Discussion)

the huge sell -off in the US

4:20

S… Speaker 2 (Discussion)

stock market yesterday and now happening in Japan too.

4:23

S… Speaker 2 (Discussion)

So all those that got the short -term

4:27

S… Speaker 2 (Discussion)

volatility of the stock market really affect the way that the big

4:32

S… Speaker 2 (Discussion)

public pension plan too.

4:33

S… Speaker 2 (Discussion)

So on one hand,

4:36

S… Speaker 2 (Discussion)

you probably...

4:38

S… Speaker 2 (Discussion)

Feel this,

4:39

S… Speaker 2 (Discussion)

but the others.

4:40

S… Speaker 2 (Discussion)

Statistically,

4:41

S… Speaker 2 (Discussion)

20 years ago,

4:43

S… Speaker 2 (Discussion)

average hoarding period of the New

4:47

S… Speaker 2 (Discussion)

York stock exchange shareholder is about seven years.

4:51

S… Speaker 2 (Discussion)

Now,

4:53

S… Speaker 2 (Discussion)

reported is less than one month.

4:55

S… Speaker 2 (Discussion)

The reason why is,

4:57

S… Speaker 2 (Discussion)

here is the inconvenient truth.

5:00

S… Speaker 5 (Discussion)

GPF,

5:01

S… Speaker 2 (Discussion)

for example, owns about 8 % of Japanese stock market,

5:04

S… Speaker 2 (Discussion)

but we cannot participate in today's market

5:08

S… Speaker 2 (Discussion)

because we are long -term holder,

5:09

S… Speaker 2 (Discussion)

we are long -term owner.

5:11

S… Speaker 2 (Discussion)

So who's actually dictating today's market is the person who

5:15

S… Speaker 2 (Discussion)

trades the most.

5:16

S… Speaker 2 (Discussion)

And if you look at the recent statistics,

5:20

S… Speaker 2 (Discussion)

I don't know about the Japanese market,

5:22

S… Speaker 2 (Discussion)

but the New York Stock Exchange,

5:23

S… Speaker 2 (Discussion)

80 % of trade is now made by algorithm.

5:27

S… Speaker 2 (Discussion)

So it's a machine who's now dictating how the market behaves

5:31

S… Speaker 2 (Discussion)

on a daily basis.

5:32

S… Speaker 2 (Discussion)

And then that's really affect the mindset of people working in

5:36

S… Speaker 2 (Discussion)

the long -term capital investors.

5:39

S… Speaker 2 (Discussion)

And then I need to bring in,

5:41

S… Speaker 2 (Discussion)

I think I try to bring in a lot of new,

5:43

S… Speaker 2 (Discussion)

you know, structure to kind of like help the people to focus

5:47

S… Speaker 2 (Discussion)

on long -termism,

5:48

S… Speaker 2 (Discussion)

but even on disclosure requirements.

5:53

S… Speaker 2 (Discussion)

We are required to disclose our performance every quarter.

5:57

S… Speaker 2 (Discussion)

But as you know,

5:58

S… Speaker 2 (Discussion)

every quarter the stock market goes up and down.

6:01

S… Speaker 2 (Discussion)

And every time the market goes down,

6:03

S… Speaker 2 (Discussion)

we receive a huge media criticism.

6:05

S… Speaker 2 (Discussion)

And that scares the people working under me.

6:08

S… Speaker 2 (Discussion)

They put the pressure on their asset manager to make a short -term performance.

6:13

S… Speaker 2 (Discussion)

So all those structures,

6:14

S… Speaker 2 (Discussion)

which lead to probably my kind of advice or suggestion to GMC,

6:19

S… Speaker 2 (Discussion)

to pursue long -term projects,

6:22

S… Speaker 2 (Discussion)

you really need to have aligned disclosure of a transparency policy.

6:26

S… Speaker 2 (Discussion)

Because every time there's a huge pressure on the policy makers or regulators,

6:30

S… Speaker 2 (Discussion)

they think it's almost a no -brainer to promise more transparency.

6:35

S… Speaker 2 (Discussion)

But sometimes they come up with the unexpected consequence

6:40

S… Speaker 2 (Discussion)

and even promoting more short terms.

6:42

S… Speaker 2 (Discussion)

And the second is,

6:44

S… Speaker 2 (Discussion)

GPIF was a big and diversified

6:48

S… Speaker 2 (Discussion)

investor.

6:49

S… Speaker 2 (Discussion)

Whatever the investment strategy we try to make on a daily basis,

6:53

S… Speaker 2 (Discussion)

over the next 20,

6:55

S… Speaker 2 (Discussion)

30 years,

6:56

S… Speaker 2 (Discussion)

our performance is pretty much aligned with how

7:01

S… Speaker 2 (Discussion)

the macroeconomy grows.

7:05

S… Speaker 2 (Discussion)

So what I discovered is we really cannot diversify

7:09

S… Speaker 2 (Discussion)

our portfolio away from the systemic risk which is affecting

7:13

S… Speaker 2 (Discussion)

whole society.

7:14

S… Speaker 2 (Discussion)

So there is something like climate change.

7:17

S… Speaker 2 (Discussion)

It affects every single holding of the GPRF.

7:21

S… Speaker 2 (Discussion)

And the conventional wisdom of the portfolio management,

7:25

S… Speaker 2 (Discussion)

how to diversify,

7:27

S… Speaker 2 (Discussion)

how to hedge,

7:28

S… Speaker 2 (Discussion)

none of those helps.

7:29

S… Speaker 2 (Discussion)

So we named it as a universal

7:33

S… Speaker 2 (Discussion)

owner.

7:34

S… Speaker 2 (Discussion)

So the big asset owner who owns the big

7:38

S… Speaker 2 (Discussion)

portfolio, they actually own the universe of the global economy.

7:42

S… Speaker 2 (Discussion)

And for us to have a healthy global economy,

7:45

S… Speaker 2 (Discussion)

we need to have the other...

7:50

S… Speaker 2 (Discussion)

healthy society or stable society.

7:53

S… Speaker 2 (Discussion)

We need social stability.

7:54

S… Speaker 2 (Discussion)

And for the society to be stable,

7:57

S… Speaker 2 (Discussion)

we need to have a healthy planet.

7:59

S… Speaker 2 (Discussion)

So that actually has the interconnection

8:03

S… Speaker 2 (Discussion)

among all those that have impact on their portfolio performance.

8:07

S… Speaker 2 (Discussion)

So I realized that we just cannot focus on what

8:11

S… Speaker 2 (Discussion)

we can buy or sell.

8:14

S… Speaker 2 (Discussion)

to guarantee or deliver long -term performance to the other unmentioned

8:18

S… Speaker 4 (Discussion)

beneficiaries.

8:19

S… Speaker 2 (Discussion)

So those are two biggest discoveries in terms of the portfolio

8:23

S… Speaker 2 (Discussion)

management.

8:24

S… Speaker 2 (Discussion)

And the last one,

8:25

S… Speaker 2 (Discussion)

which is actually not less important,

8:27

S… Speaker 2 (Discussion)

is I just realized,

8:29

S… Speaker 2 (Discussion)

even when we try to bring in more and more sustainability policy,

8:33

S… Speaker 2 (Discussion)

a more and more responsible investment policy into the portfolio,

8:36

S… Speaker 2 (Discussion)

every time I felt like they were powerless.

8:40

S… Speaker 2 (Discussion)

Because when the other strategy is not aligned with the long -term policy of

8:44

S… Speaker 2 (Discussion)

the government, a lot of effort will be undermined.

8:47

S… Speaker 2 (Discussion)

So I started engaging the policy makers of Japan.

8:51

S… Speaker 2 (Discussion)

First of all,

8:52

S… Speaker 2 (Discussion)

trying to align their policy with their portfolio strategy.

8:55

S… Speaker 2 (Discussion)

And then,

8:56

S… Speaker 2 (Discussion)

after I retired from JVA,

8:58

S… Speaker 2 (Discussion)

I became the UN Special Employee to make a more global policy engagement.

9:02

S… Speaker 2 (Discussion)

But yet how the policy and the portfolio management should

9:07

S… Speaker 2 (Discussion)

work together,

9:07

S… Speaker 2 (Discussion)

or unless it's aligned.

9:09

S… Speaker 2 (Discussion)

All those long -term policy investments will be totally

9:13

S… Speaker 2 (Discussion)

underlined.

9:13

S… Speaker 2 (Discussion)

So those are probably two biggest learnings from my experience managing

9:18

S… Speaker 3 (Discussion)

GF1.

9:19

S… Speaker 1 (Discussion)

I think today was very interesting because we saw

9:23

S… Speaker 1 (Discussion)

one of the largest...

9:26

S… Speaker 1 (Discussion)

drawdowns in recent history,

9:29

S… Speaker 1 (Discussion)

$2 .5 trillion wiped off the NASDAQ.

9:33

S… Speaker 1 (Discussion)

Just wanted to hear from you,

9:35

S… Speaker 1 (Discussion)

for an institution like JBEF,

9:37

S… Speaker 1 (Discussion)

how do you stay patient through such crisis and how do you

9:41

S… Speaker 1 (Discussion)

keep objectives in sight when markets are turning against you?

9:45

S… Speaker 2 (Discussion)

I think the point is like,

9:48

S… Speaker 2 (Discussion)

you know,

9:49

S… Speaker 2 (Discussion)

there's a lot of economic research to prove.

9:53

S… Speaker 2 (Discussion)

Market to make a right decision for long term.

9:56

S… Speaker 2 (Discussion)

So if you own the market over

10:00

S… Speaker 2 (Discussion)

30 years,

10:00

S… Speaker 2 (Discussion)

you end up as making a right investment decision.

10:04

S… Speaker 2 (Discussion)

But also the academic study proves,

10:06

S… Speaker 2 (Discussion)

market always makes short -term mistakes.

10:11

S… Speaker 2 (Discussion)

So I think the long -term investors

10:15

S… Speaker 2 (Discussion)

and big investors like the GBAF should be doing,

10:16

S… Speaker 2 (Discussion)

and also maybe the sovereign wealth fund should be doing.

10:20

S… Speaker 2 (Discussion)

Don't pay too much attention to the short -term volatility.

10:22

S… Speaker 2 (Discussion)

And I believe that even though short

10:27

S… Speaker 2 (Discussion)

-term volatility is created by machines or short -term

10:31

S… Speaker 2 (Discussion)

traders, the responsibility of long

10:35

S… Speaker 2 (Discussion)

-term performance of the market always

10:40

S… Speaker 2 (Discussion)

comes back to the real Azerona,

10:43

S… Speaker 2 (Discussion)

the human Azerona.

10:44

S… Speaker 2 (Discussion)

So the most important thing is we shouldn't drop into the short

10:48

S… Speaker 2 (Discussion)

-termism paying too much attention to what's happening in the world.

10:52

S… Speaker 2 (Discussion)

Because as I said,

10:54

S… Speaker 2 (Discussion)

the market is proven to make short -term mistakes all the time.

10:57

S… Speaker 2 (Discussion)

So rather than joining to enhance

11:02

S… Speaker 2 (Discussion)

or even...

11:04

S… Speaker 2 (Discussion)

you know, promote more short -termism.

11:06

S… Speaker 2 (Discussion)

I think one of the roles that the pension fund or so people might

11:10

S… Speaker 2 (Discussion)

have to play is they have to act as a counterbalance to the

11:14

S… Speaker 2 (Discussion)

short -term or short -term volatility.

11:16

S… Speaker 6 (Discussion)

So,

11:17

S… Speaker 7 (Discussion)

you know,

11:18

S… Speaker 2 (Discussion)

something like when the market is going down,

11:20

S… Speaker 2 (Discussion)

we stay there,

11:21

S… Speaker 7 (Discussion)

calm.

11:22

S… Speaker 2 (Discussion)

And when the market is going up,

11:24

S… Speaker 2 (Discussion)

we stay there,

11:25

S… Speaker 2 (Discussion)

calm.

11:25

S… Speaker 2 (Discussion)

So, you know,

11:26

S… Speaker 2 (Discussion)

I think a lot of people ask me,

11:28

S… Speaker 2 (Discussion)

you know, should the GVIs just increase investment into the AI?

11:31

S… Speaker 2 (Discussion)

And the next day, they said,

11:32

S… Speaker 2 (Discussion)

should we just withdraw money from my app?

11:35

S… Speaker 2 (Discussion)

Those kind of strategies don't make any difference.

11:38

S… Speaker 2 (Discussion)

It's proven.

11:39

S… Speaker 2 (Discussion)

I studied the long -term performance of big pension one,

11:43

S… Speaker 2 (Discussion)

the insurance company,

11:44

S… Speaker 2 (Discussion)

for 30 years.

11:45

S… Speaker 4 (Discussion)

For one year,

11:47

S… Speaker 2 (Discussion)

the actual investment decision made a very real difference.

11:51

S… Speaker 2 (Discussion)

But if you look at the 30 years of the performance,

11:53

S… Speaker 2 (Discussion)

you will see surprisingly little difference in

11:58

S… Speaker 2 (Discussion)

the performance by the different big asset owners.

12:00

S… Speaker 2 (Discussion)

That means...

12:02

S… Speaker 2 (Discussion)

You know, all the big pension funds,

12:04

S… Speaker 2 (Discussion)

the sovereign wealth fund,

12:05

S… Speaker 2 (Discussion)

we are universal owners.

12:07

S… Speaker 2 (Discussion)

We own the universe of the macro economy,

12:10

S… Speaker 2 (Discussion)

and we own the universe of society.

12:12

S… Speaker 2 (Discussion)

We own the universe of the actual universe.

12:14

S… Speaker 2 (Discussion)

So,

12:15

S… Speaker 2 (Discussion)

I think all those sell -offs,

12:17

S… Speaker 2 (Discussion)

we just need to regard that as growth and volatility,

12:21

S… Speaker 2 (Discussion)

and we shouldn't enhance it.

12:23

S… Speaker 2 (Discussion)

We should act as the account balance to that.

12:25

S… Speaker 1 (Discussion)

Let's spend some time to talk and

12:29

S… Speaker 1 (Discussion)

unpack this idea and concept called Vision Capital.

12:33

S… Speaker 1 (Discussion)

What does it mean to you?

12:34

S… Speaker 1 (Discussion)

And how do you define it?

12:36

S… Speaker 1 (Discussion)

How is it different from conventional approaches to investing?

12:38

S… Speaker 5 (Discussion)

Yeah,

12:39

S… Speaker 2 (Discussion)

I started using a word of patient capital toward the end of my term at the GTIF.

12:44

S… Speaker 2 (Discussion)

Because I used to use like a long -term investor.

12:47

S… Speaker 2 (Discussion)

But one day I just realized,

12:50

S… Speaker 2 (Discussion)

you know,

12:51

S… Speaker 2 (Discussion)

I can be a long -term investor by holding the asset.

12:54

S… Speaker 2 (Discussion)

But I need to have a sense

12:58

S… Speaker 2 (Discussion)

of ownership.

12:59

S… Speaker 2 (Discussion)

to really believe in the business and also prepare

13:03

S… Speaker 2 (Discussion)

to take responsibility and most importantly,

13:07

S… Speaker 2 (Discussion)

wouldn't get affected

13:12

S… Speaker 2 (Discussion)

by the short -term up and down of the project.

13:15

S… Speaker 2 (Discussion)

So some of the projects like GMC is definitely

13:20

S… Speaker 2 (Discussion)

a long -term project.

13:21

S… Speaker 2 (Discussion)

And for those kind of things,

13:23

S… Speaker 2 (Discussion)

long -term investor to investor doesn't mean much.

13:26

S… Speaker 2 (Discussion)

You need to have the patient capital.

13:28

S… Speaker 2 (Discussion)

And for me,

13:30

S… Speaker 2 (Discussion)

patient meaning it's making an active decision to

13:34

S… Speaker 2 (Discussion)

stay on the journey together

13:39

S… Speaker 2 (Discussion)

with that project or that business.

13:40

S… Speaker 2 (Discussion)

So the patience is an active choice.

13:43

S… Speaker 2 (Discussion)

So I'll give you one example.

13:45

S… Speaker 2 (Discussion)

So nowadays,

13:46

S… Speaker 2 (Discussion)

a lot of people invest in the index,

13:48

S… Speaker 2 (Discussion)

like the S &P 500.

13:49

S… Speaker 2 (Discussion)

So if you invest in the S &P 500,

13:53

S… Speaker 2 (Discussion)

you are indirectly on the 100th American corporation.

13:57

S… Speaker 2 (Discussion)

If you invest in Nikkei,

13:59

S… Speaker 2 (Discussion)

you own the hungriest of a Japanese corporation.

14:01

S… Speaker 2 (Discussion)

But do you have a sense of ownership?

14:04

S… Speaker 2 (Discussion)

I think this is the difference.

14:08

S… Speaker 2 (Discussion)

All those that are the energy or

14:12

S… Speaker 2 (Discussion)

commitment to go through the up and

14:17

S… Speaker 2 (Discussion)

down, but still trying to stay with the people who are operating

14:21

S… Speaker 2 (Discussion)

throughout the course of the journey requires active judgment,

14:25

S… Speaker 2 (Discussion)

active decision to become an owner.

14:28

S… Speaker 2 (Discussion)

So I started using the

14:33

S… Speaker 2 (Discussion)

word patient capital to distinguish these are the capital who

14:37

S… Speaker 2 (Discussion)

made an active decision to become an owner of that project.

14:40

S… Speaker 2 (Discussion)

And being owner means you have to share

14:44

S… Speaker 2 (Discussion)

all the responsibility and all the goals throughout the journey.

14:49

S… Speaker 2 (Discussion)

So it's not simply defined by how

14:53

S… Speaker 2 (Discussion)

long you hold the investment.

14:56

S… Speaker 2 (Discussion)

rather it should be defined if you have

15:00

S… Speaker 2 (Discussion)

made an active decision to become an owner and have a patience

15:04

S… Speaker 2 (Discussion)

to go through up and down together with the team or the investors.

15:08

S… Speaker 2 (Discussion)

So I think that's the way I distinguish the patient capital

15:13

S… Speaker 2 (Discussion)

from long -term capital.

15:14

S… Speaker 1 (Discussion)

Let's try to translate that into perhaps

15:18

S… Speaker 1 (Discussion)

a sector that is considered the hottest team right now,

15:22

S… Speaker 1 (Discussion)

which is artificial intelligence.

15:24

S… Speaker 1 (Discussion)

So you look at the mega -cap tech companies in the US,

15:27

S… Speaker 1 (Discussion)

they're close to spending 700 billion on AI infrastructure this

15:31

S… Speaker 1 (Discussion)

year alone, much of it being financed by debt.

15:34

S… Speaker 1 (Discussion)

Is this the patient capital of our generation or short

15:38

S… Speaker 1 (Discussion)

-term speculation on a long -term scale?

15:40

S… Speaker 5 (Discussion)

Well,

15:43

S… Speaker 2 (Discussion)

that's a difficult question to answer because

15:47

S… Speaker 2 (Discussion)

as I said,

15:48

S… Speaker 2 (Discussion)

like a short -term,

15:49

S… Speaker 2 (Discussion)

I don't know.

15:50

S… Speaker 2 (Discussion)

But the long -term,

15:52

S… Speaker 5 (Discussion)

we wouldn't know.

15:53

S… Speaker 2 (Discussion)

And the issue is,

15:55

S… Speaker 2 (Discussion)

whether those investors rushing into the AI,

15:58

S… Speaker 2 (Discussion)

now rushing out of AI,

16:00

S… Speaker 2 (Discussion)

did they commit it?

16:03

S… Speaker 2 (Discussion)

Did they commit to promote the growth

16:07

S… Speaker 2 (Discussion)

of AI?

16:07

S… Speaker 2 (Discussion)

They didn't.

16:09

S… Speaker 2 (Discussion)

I think this is the issue.

16:10

S… Speaker 7 (Discussion)

You know,

16:11

S… Speaker 2 (Discussion)

when we see such an up and down in a specific sector,

16:16

S… Speaker 2 (Discussion)

That attracts a lot of the people who just want to take the advantage

16:20

S… Speaker 2 (Discussion)

of the Shottam,

16:21

S… Speaker 2 (Discussion)

the enthusiasm

16:26

S… Speaker 4 (Discussion)

model.

16:27

S… Speaker 2 (Discussion)

And those people will come and go.

16:30

S… Speaker 2 (Discussion)

So I think we don't need to judge it.

16:33

S… Speaker 2 (Discussion)

And then if I were still money energy guy,

16:36

S… Speaker 2 (Discussion)

I probably would tell them like the AI sector is already attracting

16:40

S… Speaker 2 (Discussion)

a lot of money while they are selling more from the green technology.

16:44

S… Speaker 2 (Discussion)

So maybe the role of the big investor like the universal owner,

16:48

S… Speaker 2 (Discussion)

this is the time to allocate back into the green energy.

16:52

S… Speaker 2 (Discussion)

while the private sector is anyway putting a lot of money into

16:56

S… Speaker 2 (Discussion)

the AI.

16:58

S… Speaker 2 (Discussion)

So whether it's financed by the equity or debt,

17:01

S… Speaker 2 (Discussion)

it doesn't really matter.

17:03

S… Speaker 2 (Discussion)

But at the end of the day,

17:06

S… Speaker 2 (Discussion)

because if they borrow from the bank,

17:09

S… Speaker 2 (Discussion)

the bank is owned by somebody who owns their stock too.

17:12

S… Speaker 2 (Discussion)

So it's just a matter of different structure.

17:14

S… Speaker 2 (Discussion)

But when the money is rushing into one sector,

17:17

S… Speaker 2 (Discussion)

I think there is a role for sovereign wealth fund and pension fund.

17:21

S… Speaker 2 (Discussion)

to try to become a sort of counterbalance to

17:26

S… Speaker 2 (Discussion)

keep the market more stable.

17:27

S… Speaker 2 (Discussion)

And then,

17:28

S… Speaker 2 (Discussion)

as the other big asset owners losing that,

17:31

S… Speaker 2 (Discussion)

kind of like this,

17:33

S… Speaker 2 (Discussion)

giving up on that responsibility,

17:35

S… Speaker 2 (Discussion)

I think that's one reason why the market now becomes more and more volatile.

17:38

S… Speaker 2 (Discussion)

And that's not going to help anybody.

17:42

S… Speaker 1 (Discussion)

Let's pivot and perhaps talk about Asia's next century,

17:46

S… Speaker 1 (Discussion)

in particular investment philosophy between the East

17:50

S… Speaker 1 (Discussion)

versus the West,

17:51

S… Speaker 1 (Discussion)

which is interesting because looking at your resume,

17:54

S… Speaker 1 (Discussion)

you also worked in Western firms like Collar Capital,

17:57

S… Speaker 1 (Discussion)

and you also managed Japan's pension fund.

18:00

S… Speaker 1 (Discussion)

As Asia becomes an increasingly important center for

18:04

S… Speaker 1 (Discussion)

economic trade,

18:05

S… Speaker 1 (Discussion)

growth,

18:06

S… Speaker 1 (Discussion)

what lessons should we learn from the development models of the past?

18:13

S… Speaker 2 (Discussion)

You know, Japan is an Asian country,

18:16

S… Speaker 2 (Discussion)

but we basically follow the Western economic growth

18:20

S… Speaker 2 (Discussion)

model and we are very successful.

18:22

S… Speaker 2 (Discussion)

But the one thing I really wanted to say

18:28

S… Speaker 2 (Discussion)

today is that,

18:29

S… Speaker 2 (Discussion)

you know, Bhutan probably should learn from our success but

18:33

S… Speaker 2 (Discussion)

don't need to repeat our mistakes.

18:36

S… Speaker 2 (Discussion)

And one of the mistakes I think we had is,

18:39

S… Speaker 7 (Discussion)

you know,

18:40

S… Speaker 2 (Discussion)

when we are developing our growing economy or industrial economy,

18:45

S… Speaker 2 (Discussion)

at that time,

18:47

S… Speaker 2 (Discussion)

we are very naive or maybe not educated about the environment

18:52

S… Speaker 2 (Discussion)

impact or social impact of those industrial developments.

18:56

S… Speaker 2 (Discussion)

And then afterwards,

18:58

S… Speaker 2 (Discussion)

we all of a sudden became aware,

19:00

S… Speaker 2 (Discussion)

you know,

19:01

S… Speaker 2 (Discussion)

there's a negative side or a negative impact to all those economic growths.

19:05

S… Speaker 2 (Discussion)

And then we tried to solve it.

19:07

S… Speaker 2 (Discussion)

But it's being always reactive.

19:10

S… Speaker 2 (Discussion)

And in Asia,

19:12

S… Speaker 2 (Discussion)

particularly the one who are studying now,

19:14

S… Speaker 2 (Discussion)

has a huge advantage which you can actually start proactively.

19:18

S… Speaker 2 (Discussion)

So I think the Honorable Prime Minister you talked about the,

19:22

S… Speaker 2 (Discussion)

you know, cross -national...

19:25

S… Speaker 2 (Discussion)

happiness and also things like the development of GMC.

19:28

S… Speaker 2 (Discussion)

It's not like one goes at the expense

19:33

S… Speaker 2 (Discussion)

of others.

19:34

S… Speaker 2 (Discussion)

They should go together.

19:35

S… Speaker 2 (Discussion)

But that kind of mindset we didn't have.

19:39

S… Speaker 2 (Discussion)

So that's one thing.

19:41

S… Speaker 2 (Discussion)

I think the newly developing Asia should not

19:46

S… Speaker 2 (Discussion)

repeat our reactive approaches to solve

19:50

S… Speaker 2 (Discussion)

the issue.

19:50

S… Speaker 2 (Discussion)

And the second point is...

19:53

S… Speaker 2 (Discussion)

To achieve those things,

19:54

S… Speaker 2 (Discussion)

the one kind of human capital we have is very important.

19:57

S… Speaker 2 (Discussion)

So the getting education is very good.

20:00

S… Speaker 2 (Discussion)

and Western education has been very,

20:02

S… Speaker 2 (Discussion)

very helpful for the development

20:06

S… Speaker 2 (Discussion)

country to bring up their knowledge level and

20:10

S… Speaker 2 (Discussion)

innovation.

20:11

S… Speaker 2 (Discussion)

But at the same time,

20:13

S… Speaker 2 (Discussion)

we basically didn't really think about our cultural

20:17

S… Speaker 6 (Discussion)

heritage.

20:18

S… Speaker 2 (Discussion)

So I was thinking about how I became myself,

20:22

S… Speaker 2 (Discussion)

like an international business person.

20:25

S… Speaker 2 (Discussion)

When I was young,

20:26

S… Speaker 2 (Discussion)

I really tried to become an international person.

20:28

S… Speaker 2 (Discussion)

But at that time,

20:30

S… Speaker 2 (Discussion)

becoming an international citizen is becoming westernized.

20:34

S… Speaker 2 (Discussion)

I think that time is over.

20:37

S… Speaker 2 (Discussion)

We really have to become a regional citizen first.

20:41

S… Speaker 2 (Discussion)

So I think that,

20:42

S… Speaker 2 (Discussion)

Teru Sato -san,

20:44

S… Speaker 2 (Discussion)

I always think you are one of the good role model of a regional

20:48

S… Speaker 2 (Discussion)

citizen.

20:50

S… Speaker 2 (Discussion)

I'm very ashamed of.

20:51

S… Speaker 2 (Discussion)

I spend much less time in Asia,

20:53

S… Speaker 2 (Discussion)

so I'm more international,

20:54

S… Speaker 2 (Discussion)

but not regional.

20:56

S… Speaker 2 (Discussion)

I think the concept of,

20:58

S… Speaker 7 (Discussion)

you know,

20:59

S… Speaker 5 (Discussion)

we are regional citizens,

21:01

S… Speaker 2 (Discussion)

because when I was advocating for sustainable investment

21:05

S… Speaker 2 (Discussion)

and ESG,

21:06

S… Speaker 2 (Discussion)

environment, social governance,

21:08

S… Speaker 2 (Discussion)

I always tried to agree on a very high -level purpose with,

21:12

S… Speaker 6 (Discussion)

like,

21:13

S… Speaker 5 (Discussion)

the...

21:14

S… Speaker 2 (Discussion)

mainstream financial community,

21:16

S… Speaker 2 (Discussion)

which is like a quite,

21:17

S… Speaker 2 (Discussion)

you know, dominant by the Western entrepreneurs.

21:20

S… Speaker 2 (Discussion)

And that's why I really focused on changing the

21:24

S… Speaker 2 (Discussion)

rule of the game rather than trying to have real purpose.

21:27

S… Speaker 2 (Discussion)

But when I started talking to the Asian investors about the my

21:31

S… Speaker 2 (Discussion)

advocacy and the importance of the ESG integration,

21:34

S… Speaker 2 (Discussion)

I immediately felt they actually shared the

21:38

S… Speaker 2 (Discussion)

purpose.

21:40

S… Speaker 2 (Discussion)

So, but to move the global capital market,

21:43

S… Speaker 2 (Discussion)

that was my goal.

21:43

S… Speaker 2 (Discussion)

I really need to change the behavior of the mainstream,

21:46

S… Speaker 2 (Discussion)

like Wall Street and the city of London.

21:49

S… Speaker 2 (Discussion)

So that's why I needed to focus on the rule of the game.

21:52

S… Speaker 2 (Discussion)

But agreeing on the purpose is much stronger than

21:56

S… Speaker 2 (Discussion)

agreeing on the rule of the game.

21:58

S… Speaker 2 (Discussion)

And I think that's something that we should be doing.

22:02

S… Speaker 2 (Discussion)

And then also,

22:03

S… Speaker 2 (Discussion)

interestingly,

22:04

S… Speaker 2 (Discussion)

there's increasing interest in our philosophy,

22:08

S… Speaker 2 (Discussion)

our Eastern philosophy,

22:09

S… Speaker 2 (Discussion)

like Buddhism,

22:10

S… Speaker 2 (Discussion)

you know, Buddhism,

22:11

S… Speaker 2 (Discussion)

Buddhism, and then it's Japanese.

22:13

S… Speaker 2 (Discussion)

And then a lot of my Western or like CEO

22:18

S… Speaker 2 (Discussion)

friends, they want to spend time in Asia trying to learn our Eastern philosophy.

22:23

S… Speaker 2 (Discussion)

So it's becoming trendy,

22:25

S… Speaker 2 (Discussion)

but we just need to make sure.

22:28

S… Speaker 2 (Discussion)

Rather than saying that there is a trend to the outsiders,

22:32

S… Speaker 2 (Discussion)

we just need to integrate that kind of thinking into our own economic

22:36

S… Speaker 4 (Discussion)

development.

22:37

S… Speaker 2 (Discussion)

And I think that how vision works together becomes

22:41

S… Speaker 1 (Discussion)

increasingly.

22:41

S… Speaker 1 (Discussion)

What's

22:45

S… Speaker 1 (Discussion)

interesting is you spoke about the role of the game.

22:49

S… Speaker 1 (Discussion)

And you've also pioneered this idea of universal ownership

22:53

S… Speaker 1 (Discussion)

and cross -generational investing.

22:56

S… Speaker 1 (Discussion)

So how did you embed that idea and philosophy in

23:00

S… Speaker 1 (Discussion)

GPIF when you were CIO,

23:03

S… Speaker 1 (Discussion)

so that everyone in the organization from top to bottom was

23:07

S… Speaker 1 (Discussion)

practicing that philosophy?

23:08

S… Speaker 5 (Discussion)

Well,

23:10

S… Speaker 2 (Discussion)

I never aimed to just make sure that GPIF,

23:14

S… Speaker 2 (Discussion)

the team,

23:15

S… Speaker 2 (Discussion)

behave in that particular way.

23:17

S… Speaker 2 (Discussion)

But I just felt like for us to make a difference,

23:20

S… Speaker 2 (Discussion)

we need to bring more people into the movement.

23:24

S… Speaker 2 (Discussion)

So I just need to have some vocabulary I

23:28

S… Speaker 2 (Discussion)

can just easily get the people's attention and

23:32

S… Speaker 2 (Discussion)

also easy to make them understand.

23:36

S… Speaker 2 (Discussion)

So before I came up with the idea of a universal

23:41

S… Speaker 2 (Discussion)

ownership and a cross -generational investor,

23:43

S… Speaker 2 (Discussion)

I spent 30 minutes trying to tell them

23:47

S… Speaker 2 (Discussion)

why I'm worried about climate change.

23:49

S… Speaker 2 (Discussion)

Because everyone said,

23:50

S… Speaker 2 (Discussion)

you should be worried about Wall Street,

23:52

S… Speaker 2 (Discussion)

what happened last night.

Summary

Ask AI About This Transcript