# Looking Forward Gpfas Focus For 2021

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[00:00:00.000] Hi everyone, this is Peter Bassler. We're back with another Peer Connections podcast,
[00:00:04.760] which is the podcast series for the Global Peer Financing Association, otherwise known
[00:00:09.380] as GPFA. And I've got here our chair, Rob Gooby from HOOP, Healthcare of Ontario Pension
[00:00:15.680] Plan. How are you doing, Rob?
[00:00:17.100] I'm doing good. Happy to be here, Peter.
[00:00:19.200] Excellent. I'm also joined by Brooke Gilman, who is the Secretary of GPFA and works very
[00:00:25.100] closely with Rob and the other four founding members. So welcome, Brooke.
[00:00:28.680] Hi, Peter. Thank you.
[00:00:30.460] So it's been six months. It's the beginning of a new year. A lot's happened with GPFA,
[00:00:36.120] and I know there's a lot of excitement about what could and will happen going forward. So
[00:00:40.260] maybe just give us your thoughts as being one of the early people that was interested in this
[00:00:45.640] concept. How do you feel right now after six months behind us on this initiative?
[00:00:50.930] Thank you, Peter. I'm really happy to be here again. You know, Peter, we started this organization
[00:00:55.590] back in July of 2020.
[00:00:58.570] When we started, there were four members,
[00:01:00.970] HOOP, Health Care Frontier Pension Plan,
[00:01:03.310] CalPERS, Ohio, and SWIB.
[00:01:06.270] Total asset under management,
[00:01:08.030] lendable asset was just under 1 trillion.
[00:01:10.970] Today, we have 11 members
[00:01:12.950] and the membership grew not only within North America,
[00:01:17.170] but we have members in Europe,
[00:01:18.690] we have members in Australia.
[00:01:20.650] And the total asset under management
[00:01:22.770] or lendable asset is over 6 trillion.
[00:01:25.590] So really happy to see that growth in membership, and I'm really happy to see the amount of
[00:01:30.470] assets we have, Lendable Asset today.
[00:01:33.230] Thanks, Rob.
[00:01:33.970] That's great.
[00:01:34.670] I think the group has come a long way since its founding.
[00:01:37.930] It's been very impressive, and I think the market has paid a lot of attention to it,
[00:01:42.350] and a lot of people are watching what happens next.
[00:01:45.670] So with that in mind, I know we've got Brooke Gilman here as well with us.
[00:01:49.230] So Brooke, I don't know if you have any thoughts as you've interacted with Rob and others at
[00:01:53.810] GPFA and elsewhere, how this organization thinks about the short term, the next three
[00:01:58.430] months as far as goals, and then maybe the bigger picture of how does this translate
[00:02:03.830] or transcend securities finance and get into other areas where pensions may have common
[00:02:08.130] goals?
[00:02:09.800] Sure.
[00:02:10.100] I'm happy to address the near-term goals.
[00:02:12.740] And Rob, I think you'd be better positioned to talk about the longer-term vision and what
[00:02:16.760] you're planning for the organization.
[00:02:18.460] But as Rob noted, there's been significant increase in the membership scope over the past six months. And really what Rob and the other founding members at CalPERS, OhioPERS and State of Wisconsin have done is to create a community for themselves of beneficial owners in this market.
[00:02:38.780] And to try to put some structure and organization around that community to allow it to grow across the globe, really, for others that are engaged in securities lending and financing type transactions and can more formalize the type of interaction that they can have one another as peers together.
[00:02:57.400] And so with that growth that they've seen over the past six months and the expected continued growth that they're hoping to achieve in 2021, I think one of the biggest focus that the organization has in the nearer term is to really create a stronger sense of community and to show other members that have joined in the more recent period,
[00:03:20.080] The value that the original founding members have all found by having that strong connection with one another and having those open lines of communication to discuss best practices, to explore new opportunities, to potentially trade with one another, to bounce ideas off of one another and things like that.
[00:03:40.660] And so I think in the near term, trying to give those new members that same sense of community and feeling that they belong to this group is one of the major points of focus.
[00:03:52.880] But then from there, as the group continues to expand, I know, Rob, maybe you can talk about some of the visions that you have and others have in terms of the areas of focus.
[00:04:03.780] The ability to share best practice is not just specific to securities lending, but also in some of the other disciplines across your organization.
[00:04:11.880] Thanks, Brooke.
[00:04:12.820] So the way I look at this is, yes, the GPFA, one of the main goals is to enhance peer-to-peer
[00:04:19.320] trading.
[00:04:20.080] But in order to focus on peer-to-peer trading, you also got to think about the activities
[00:04:23.980] that support peer-to-peer trading.
[00:04:26.140] You got to think about operation, credit, legal, ESG factors, technology, and the GPFA
[00:04:33.840] membership.
[00:04:34.400] What we want to do, we want to continue to focus on securities finance and peer-to-peer trading, as an example, but also drill down deeper into the disciplines.
[00:04:45.360] For example, I might have operation issues to deal with, or I might have challenges with credit.
[00:04:51.380] But the same challenges that I face is very similar challenges CalPERS would be facing or Ohio would be facing.
[00:04:58.220] So we want to share that information, come together, and create sub-communities or maybe working groups, if you will.
[00:05:06.340] And once we create these working groups, we can share information, create best practices, and come up with the most efficient way to communicate and get trades done and also help each other out in the process.
[00:05:19.530] That's great. Thanks to both of you.
[00:05:20.950] I mean, I think what's really powerful about this organization is that you're representing end beneficiaries, right?
[00:05:27.290] end pensioners and most organizations are representing banks brokers people like that
[00:05:34.630] and this is the first of its kind in my understanding that it's really the end
[00:05:38.510] beneficiaries and you guys have so many members when you put all the organizations together this
[00:05:43.210] is really grassroots individual people's interests at the end of the day i know that
[00:05:48.550] has been a big factor for you rob and how you think about this the gpf when we just originally
[00:05:54.210] started back in July 2020, we had about, we represent 3 million members. And the members
[00:06:01.290] are frontline workers. These are existing pensioners and active members of our society
[00:06:07.030] who is paying pension checks on a monthly basis. Today, we represent over 5 million members.
[00:06:14.190] And we have to remember, as a buy-side community, thinking about the GPFA, Global PF Financing
[00:06:20.670] Association. When we think about a membership, why we are in existence, it's not necessarily
[00:06:26.610] to do securities financing. We are in existence really to manage and have a fiduciary duty to
[00:06:32.470] our membership. And our memberships are the existing senior citizens that we pay pension
[00:06:37.930] checks to. And our memberships are also the active members that we have. On a monthly basis,
[00:06:43.170] these active members are making a payment every month of their paychecks with the hope to receive
[00:06:48.590] a pension in the old age time. So I think from this perspective, the GPFA is representing
[00:06:54.350] a larger membership. One of the challenging issues right now is the overall market backdrop.
[00:07:00.620] Today, the environment is such that there's over $18 trillion of negative yields.
[00:07:06.230] And when pension plans and asset owner thinks about managing their asset in a negative yield
[00:07:11.690] environment is a lot different than we used to two, three years ago, when yields were four and
[00:07:18.010] 5%. So it's a point where, as an organization, we want to help each other out. We want to share
[00:07:23.370] information. We want to be able to become more efficient and effective and save every penny
[00:07:29.730] and save every basis points as we move forward, because those matters. So if you think about
[00:07:35.810] saving every penny and every basis points and reducing your costs, I think we would be doing
[00:07:41.630] a good for society in general by increasing the pensioner's return on a monthly basis out.
[00:07:47.390] So Rob, thanks for that.
[00:07:48.770] And this is probably for you and Brooke,
[00:07:50.350] but being a sales and marketing guy,
[00:07:51.910] I love slogans, taglines, et cetera.
[00:07:54.910] And for GPFA, you came up with better together.
[00:07:58.710] What does that mean?
[00:07:59.810] What does that really mean to pension funds
[00:08:03.010] and the people they represent?
[00:08:05.690] That's a good question, Peter.
[00:08:06.910] What does that mean?
[00:08:08.250] I'll give you an example.
[00:08:09.090] I'll give you a real life example in my situation.
[00:08:12.710] Working for Hoop,
[00:08:14.090] when I started this financing business,
[00:08:16.390] I was out there trying to get agreements done.
[00:08:20.330] And it took years and years to get a second lending agreement done.
[00:08:23.710] And in a lot of ways, most market participants
[00:08:26.850] was not sure why would a pension plan look to borrow securities
[00:08:30.290] or lend securities directly.
[00:08:32.590] It would have been nice if I had an organization to point to and say,
[00:08:35.870] hey, there's 10 other pension plans
[00:08:37.650] or 12 other pension plans engaged in the same activity.
[00:08:41.070] And it would have reduced my time to market.
[00:08:42.970] it would have reduced my effort to get the infrastructure set up, the legal infrastructure
[00:08:47.750] set up. It would have get buy-in to senior management a lot faster. So in a lot of ways,
[00:08:53.430] I think better together and working as a team is sharing that information. And you could point to
[00:08:59.290] an organization that is doing similar activities that you want to do, or you're trying to get done
[00:09:05.090] in the future. That's powerful. It's powerful to be able to act as one group. And it's always,
[00:09:10.720] the more people you have, the louder the voice you have. And it could mean negotiating with
[00:09:16.380] anybody. It could be talking to regulators. It could be a variety of different things. And I
[00:09:21.540] think that's what makes this organization so powerful. Back to your point, I mean, we start
[00:09:26.580] thinking about ESG, for example, and recognizing that the group, the GPFA, represent over $6
[00:09:32.640] trillion of assets. If we combine and work together, we could also set different principles,
[00:09:39.140] different policies, and help foster the ESG investment activities overall within industries.
[00:09:46.860] Great. I think that's spot on. And I think all this does is tell, at least from what I hear,
[00:09:52.160] and what I think the market hears, is that this organization makes a lot of sense. This
[00:09:55.440] organization is here to stay. There will be a lot of benefits to members and to the industry as a
[00:10:00.620] whole. So we're excited to watch and see what, Rob, you and your other fellow members do this
[00:10:05.760] year. So it's a lot going on for 2021 and we'll see how things progress, but it sounds like a lot's
[00:10:11.360] on the table and it's exciting times. And in terms of 2021, Peter, what I really want to do is I
[00:10:17.320] really want to build a community. I want the membership to meet on a regular basis. I also
[00:10:23.280] want to think about setting up multiple working groups and then really listen back to the
[00:10:29.100] membership and see what is important to each member and then form a consensus and then try
[00:10:34.960] to help and make progress in that one area. What I mean by that, if I were to give an example,
[00:10:40.480] today we think about FICC, repo trading within FICC, repo trades in terms of tri-party and how
[00:10:48.160] different organizations look at those different activities. And if that is something we want to
[00:10:52.740] focus on, we can focus on that. Alternatively, if we think about technology, in a lot of ways,
[00:10:58.400] all the pension plans, they have different technology requirements, but maybe it would
[00:11:03.140] be nice to have a working group that come together, share information of what technologies they're
[00:11:08.440] using, what challenges they have. I know some members build their own software. I know some
[00:11:13.640] members buy software. And I know some members also outsource this activity. But again, what I would
[00:11:20.040] like to do is I would like to bring the membership together and focus on different disciplines.
[00:11:24.740] Technology might be one, operation, credit, legal, to name a few. Great. I think this is really
[00:11:32.090] exciting and we look forward to having more podcasts to come back, checking on progress,
[00:11:37.090] checking on how things are changing and hear about developments. I was just going to add to
[00:11:41.650] your last point there, Peter. So GPFA Peer Connections is intending to continue these
[00:11:47.030] podcasts at least for the foreseeable future until maybe the world starts to change again.
[00:11:52.210] But I do think that the feedback received so far is that the membership has found the
[00:11:57.390] information useful. And I think that the current members are happy to continue to share their
[00:12:04.190] thoughts and experiences. And so if there's areas that people are interested to dive into deeper,
[00:12:10.170] definitely pass that feedback along to Rob or other members within GPFA. They're interested to
[00:12:17.430] have these podcasts be focused on the topics that people are most interested to hear about. So we
[00:12:22.770] welcome your feedback on that. Thanks, Brooke. Thanks, Rob. Great conversation. Wishing everyone
[00:12:28.150] who's listening a happy new year and keep you and your family safe. Be well. Thank you. Talk to you soon.