As a follow up to our November 13, 2014 meeting, we would like to extend a special thank you to our Keynote speaker, Grace Gu, Lead Portfolio Manager of the BlackRock for sharing her thoughts with us, in her unique and most incredible style! Thank you Grace. Everyone has been raving about your presentation. In addition, we would like to also thank Erran Berger, Senior Director of LinkedIn for making the trip from California and for providing us with a terrific discussion! Last, and absolutely not least, special thanks to both Marc Donner, Head of Infrastructure Engineering, and Chris Corrado, CIO at MSCI for hosting our event at 7 World Trade Center. The view was amazing, and the support we received from your entire team was incredible. Thank you so much.
Thanks again to all those of you who joined us at the event! Your passion and participation was absolutely incredible. Wishing you all a wonderful holiday season, and looking forward to seeing you at our next event! (Please see meeting summary below.)
-malka
Malka Treuhaft
Executive Director East Coast CIO Forum &
President
Truision Inc.
646.942.2625 (office)
917.589.1069 (mobile)
718.375.1529 (fax)
www.truision.com
The following companies are currently registered for the November 2014 meeting:
BlackRock, LinkedIn, MSD Capital, Moore Capital Management, AEGIS, Capital District Physician’s Health Plan, SBLI USA Mutual Life Insurance, North Shore-LIJ Health System, Thomson Reuters, McCann-Erickson Advertising, JP Morgan Chase and Co., Ionic Capital, Lone Peak Partners, Deerfield Partners, NYSE Euronext, Merck, Equinox, World Education Services, Inc., iQ Venture Advisors, L.P., St. John’s University, Intercept Pharmaceuticals Inc., U.S. Gas & Electric, Inc., Kita Capital Management, LLC, Yeshiva University, Imagineer Technology Group, Fir Tree Partners, Qdmh Marketing Partners, MBIA, Inside Plastics, Inc., Societe Generale, Bank of America, TPG, Eton Park, Annaly Capital Management , Financial Guaranty Insurance Company, GHF Group, Good Earth Products, Leviton, Fox Television Stations, Inc., McGraw-Hill Companies, Citibank, and Workforce Opportunity Services.
Meeting Agenda:
A: Grace Gu, of BlackRock, our Key-Note speaker, will kick off the meeting with a review of the global economic and policy developments since June 2012.
Focus on China :
- What’s happening in the PRC ?
- What should we make of the protests in Hong Kong ? Is this a sign of bigger changes afoot ?
- Has the economic model run its course ? If so, why ?
- What should we look for in an effective reform
- How to read the politics and policy implications from outside
- Q&A on above or other financial market issues of interest
B: Erran Berger, of LinkedIn, our guest speaker, will provide his insight on the following:
- News from LinkedIn
- Creating World-Class Remote Development Offices
- Is Remote Development actually worth it? In many cases there are cost benefits, but does it help or hurt productivity? What are the other benefits?
- Are there differences in industries, differences regionally?
- Where is “remote”, and what are the requirements/metrics for success?
- How should companies use LinkedIn as part of their overall social media strategy?
- LinkedIn’s member base is in many ways higher value than those of other social networks and how to take advantage of that.
- Leveraging your employees, most of whom are already on LinkedIn, to promote your company’s brand.
- Are there any case studies of using LinkedIn in this manner?
Meeting Summary:
Grace Gu: Blackrock
Grace gave us an overview of the markets:
- European – there is some volatility, due to Germany growing more slowly and Greece’s challenges to exit Troika bailouts. However, Spain is a bright spot, growing steadily.
- US – the Fed’s next move is key to what happens here next, our economy has been accustomed to low interest rates for a long time.
- While focusing the discussion on China, Grace sees China at a crossroads, she explores the various current policies:
- Economic Policy – Two camps: The first camp says growth at moderate to high pace will continue for a long time so there will be more spending on infrastructure. The second camp says it’s time to re-structure and reform in order to innovate, address, and lift the poor and middle class.
- Foreign Policy – Two main thoughts on policy position – The first is one that has been in place for 30 years, do the minimum, focus on supply chain “made in China.” The second is the “ Peaceful Super Power”, the Center of Asia.
- Political Policy – The first theory suggests that more growth brings more prosperity which lifts the standard of living. The second theory focuses on anti-corruption which helps grow the middle class (reduces the benefit of the businesses).
Grace talked us through four key drivers that will impact the markets in China over the coming years. She described these as fundamental problems.
- Thirty years of GPD growth at 10% – This trend has run its course and cannot continue. The burden on society is huge, the one child policy has created massive demographic headwinds now. As a society China has aged before its time. As a contrast she explained that it took Japan 100 years to grow its 65+ year old population from 5% to 25%. It will take China only 30 years to achieve the same level of aging.
- Export Model – China built its economy on an export model with low labor costs and low cost of capital so that they could attract companies to manufacture goods. Now there is not enough cash to loan out, banks are fighting for deposits, debt is growing faster than income. The export model no longer works.
- Debt Problem – China has reserves they can use to service debt, however, over time, the privatization has been changing the level of the state’s wealth and the reliance on private deposits has grown. For a period of time they will be able to print more money to cover their debt service, but monetary policy will increasingly walk on a thin rope.
- Housing Market – The imbalance in the housing market is a long-term issue for the country. There is an excess supply of homes and fewer young buyers. There is very high home ownership; 89% in urban areas and 97% in rural areas; (compared to USA 65% urban, 70% rural and Japan 60% and Germany 50%). Some estimated vacancy rate at 22% (compared to 2.5% in the US is considered high), and 40 million excess housing units with more supply still under development.
Erran Berger: LinkedIn
Erran focused on two topics:
- Content Focused Products
Erran spoke about social media where the consumer perception is based on the combination of the Corporate Brand and the Talent Brand.
It is clear in all the research done, that employees are your company’s most credible asset and the most trustworthy voice to promote those two brands. LinkedIn’s products leverage your company’s employees and SMEs, who are all already on LinkedIn, to get the word out to current customers, warm sales leads, prospective recruits.
- Remote Development
Erran works with and manages developers in multiple locations. He considers all those not at LinkedIn’s Mountain View location remote – those locations include San Francisco, Bangalore, New Delhi, and NYC. There was a robust discussion as to whether or not remote development was worth all the challenges. The benefits were seen as the ability to attract talent, lower costs, and improved ability to customize to a local market. The negatives were seen as lost productivity (on both sides), additional time required to get work done (sometimes due to additional iterations).
The characteristics of successful remote development include: trust, autonomy, opportunities to learn and grow for promotion, to work on interesting projects, to have an impact on technology and tools that support communication and remote locations (chat software (collaboration tools), and lastly, opportunities to recognize and honor global culture.
Grace Gu’s Bio
Global Macro Portfolio Manager, BlackRock. Following her years at Goldman Sachs as a global macro portfolio manager of the 13-billion flagship Global Alpha Hedge Fund, Grace joined Blackrock in 2008. At BlackRock, Ms. Gu built and managed a number of investment products, including BlackRock’s Multi-Asset Portfolios and the BlackRock Multi-Strategy Hedge Fund (MuSt ). Her investment process included absolute return, total return, and real return strategies with a top-down focus. Under her management, MuSt has been nominated Multi-Strategy Fund of the Year by Absolute Return (2010), and ranked among the world’s Top 100 Hedge Funds by Bloomberg (2011). Grace was named one of the Hedge Fund Rising Stars by Institutional Investor (2012). She earned a BS degree, with highest distinction, in Electrical Engineering and a MS degree in Financial Mathematics, both from Stanford University. At Stanford she was recipient of the most prestigious President Scholarship for top undergrad and Frederick Terman Award for best engineering student.
Erran Berger’s Bio
Erran Berger is responsible for Content Engineering at LinkedIn. He leads the engineering teams that develop the company’s content focused products and infrastructure, including professional publishing, SlideShare, Pulse, sharing, and Groups. He is also responsible for building out world-class engineering teams in LinkedIn’s San Francisco and New York City offices. Prior to joining LinkedIn in 2009, Erran was a senior software engineer at EMN8 (now Tillster) where he lead numerous software projects. Erran holds a BS in Computer Engineering from The University of California, San Diego.
