The asset portfolio composition of British life insurance firms, 1900–1965

Baker, Mae; Collins, Michael

doi:10.1017/s0968565003000131

Cited by 25 publications

(12 citation statements)

References 1 publication

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“…Albeit with far less discretion, Keynes led a similar shift into equities at National Mutual, investing considerably more than any other insurer (Scott (2002)). Overall, the major U.K. institutions, comprising pension funds, investment trusts, and insurance companies, also largely eschewed equities in favor of fixed-income securities in this period (Hannah (1986), Burton and Corner (1968), and Baker and Collins (2003)). Keynes's portfolio was also very different from those of highly regarded U.S. investors.…”

Section: A the Case For Equitiesmentioning

confidence: 99%

Keynes the Stock Market Investor: A Quantitative Analysis

Chambers¹,

Dimson²,

Foo³

2015

J. Financ. Quant. Anal.

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The consensus view of the influential economist John Maynard Keynes is that he was a stellar investor. We provide an extensive quantitative appraisal of his performance over a quarter century and present detailed analysis of his archived trading records. His top-down approach initially generated disappointing returns with no evidence of any market-timing ability. However, from the early 1930s his performance improved as he evolved into a bottom-up stock picker with substantial active risk and pronounced size and value tilts. Our reconstruction of Keynes’s stock trading provides a unique record of realized performance and sheds light on how equity investing developed historically.

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Section: A the Case For Equitiesmentioning

confidence: 99%

Keynes the Stock Market Investor: A Quantitative Analysis

Chambers¹,

Dimson²,

Foo³

2015

J. Financ. Quant. Anal.

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“…In a similar fashion, major UK institutional investors such as pension funds, investment trusts, and insurance companies largely eschewed equities in favour of fixed income securities in this period (Burton and Corner, 1968;Hannah, 1986;Baker and Collins, 2003).…”

Section: The Shift Into Equitiesmentioning

confidence: 99%

Keynes, King's and Endowment Asset Management

Chambers¹,

Dimson²,

Foo³

2014

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stock-picking approach in the early 1930s allowed him to maintain his commitment to equities when the market fell sharply once more in 1937-1938. In so doing, he provides an excellent example of the natural advantages that accrue to such long-horizon investors as university endowments in being able to behave in a contrarian manner during economic and financial market downturns. King's, one of the thirty-one Cambridge Colleges, was founded in 1441 by King Henry VI and lavishly endowed with agricultural real estate that stretched the length and breadth of England. Famous Kingsmen other than John Maynard Keynes include Sir Francis Walsingham, secretary of state and organizer of Queen Elizabeth I's spy service; Sir Robert Walpole, prime minister; Alan Turing, the father of modern computing; and the novelists E. M. Forster and Salman Rushdie. For centuries, their agricultural estates formed the bulk of the endowment assets of the oldest Colleges and King's was no exception. When Keynes became involved in the management of King's endowment just after World War I, he immediately undertook a substantial reallocation of the portfolio away from real estate into the new asset class, equities. At the time, other institutional investors remained reluctant to follow suit and it was not until after Keynes's death that they began to follow his example. Oxford and Cambridge ("Oxbridge") Colleges have a natural concern for preserving their wealth for future generations (Tobin 1974) and are the ultimate long-horizon investors. Keynes spotted an opportunity for such patient, long-term investors to make a substantial allocation to equities, an innovation at least as radical as the commitment to alternative assets in the late twentieth century by Yale and Harvard. He selected an asset mix for King's consistent with the implications of standard models of consumption and portfolio choice that were to appear many decades later, as described, for example, by Campbell and Viceira (2002). Keynes can justly be regarded as among the first institutional equity investors. This chapter describes why Keynes held strong views about equities and how he changed his investment approach to the benefit of lower transaction costs. We also highlight how King's benefitted from earning an emerging risk premium on UK equities despite the economic turbulence of the 1930s, as well as additional risk premia obtained through tilting the portfolio toward both value and smaller-capitalization stocks. His investment strategy benefitted the endowment considerably, to the extent that upon his death King's had at least drawn level with Trinity, the richest of the Cambridge Colleges. In the post-Keynes era, the endowment has had a more checkered history, illustrating the challenges in trying to emulate Keynes's unconventional investment approach. The chapter begins with a summary of Keynes's various investing roles in section 4.2. Section 4.3 describes our data, followed by a discussion of endowment asset management before Keynes in section 4.4. We then review Keynes'...

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“…Perhaps the most important finding of this study was the absence of any significant correlation between firm size and the proportionate holdings of ordinary shares. 46 The second study by Baker and Collins used case studies of the Midland and Westminster banks to evaluate the response of these banks to their business clients' financial distress. This study found that while the activities of these banks was consistent with the transaction bank model (the dominant paradigm in their earlier, pre-1914 study), it was also the case that in the post-Second World War period these banks were more prepared to exercise an interventionist policy, particularly for their most distressed clients.…”

Section: Accounting Banking and Financial Historymentioning

confidence: 99%

British Business History: A Review of the Periodical Literature for 2003

Higgins

2005

Business History

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The asset portfolio composition of British life insurance firms, 1900–1965

Cited by 25 publications

References 1 publication

Keynes the Stock Market Investor: A Quantitative Analysis

Keynes the Stock Market Investor: A Quantitative Analysis

Keynes, King's and Endowment Asset Management

British Business History: A Review of the Periodical Literature for 2003

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