PACIFIC PENSION INSTITUTE ANNUAL REPORT 2 011 PACIFIC CONTENTS PENSION Letter from Joseph A. Dear. Chair, Board of Directors 1-2 INSTITUTE & Marsha Vande-Berg, Chief Executive Officer Winter Roundtable, Laguna Beach 3-4 Manila Dialogue Program, Manila 5 Asian Network/Annual Dinner, Malaysia 6 Summer Roundtable, Vancouver 7-8 PPI Executive Seminar, Mumbai, New Delhi, Kuala Lumpur 9-10 Asian Roundtable, Kuala Lumpur 11-12 Membership Service, Communications and Outreach 13 Roundtables and Fiduciary Education 14 2011 Statement of Activities 15 Administration 16 Partnerships and Co-Sponsorships 16 Board of Directors and Advisory Council 17 Membership and Staff 18 Thank You 19 In Memory 20 2011 Winter Roundtable, Laguna Beach 2011 PPI Executive Seminar, Mumbai, New Delhi, Kuala Lumpur

Pacific Pension Institute, a member-driven, nonprofit educational organization, assists pension funds, corporations, financial institutions and endowments worldwide with carrying out their fiduciary responsibilities, especially with respect to Asia and the Pacific region.

2011 Summer Roundtable, Vancouver 2011 Asian Pension Fund Roundtable, Kuala Lumpur Dear Members and Friends of PPI: programming. PPI grew our plan sponsor membership base to 31 pension plan, endowment and sovereign fund members, and our corporate membership to 42 banks, asset managers The year 2011 was yet another challenging year for institutional and law firms. Our programming included the 2011 Winter Roundtable in Southern investors. The debt crisis in Europe, persistent unemployment California, titled Environment for Investment, Risk, Reward or Distraction, and the Summer and a depressed housing market in the United States, together Roundtable, taking place in British Columbia, titled Asia’s Southern Rim: Perspectives from with a realization that emerging markets in Asia and elsewhere India, Southeast Asia and Oceana. are indeed dependent on the outlook in the West, combined to contribute in significant ways to ongoing market volatility. Still, Our annual Asian Pension Fund Roundtable took place in Kuala Lumpur, Malaysia, where asset managers for public and privately-held funds managed to the Institute shared the platform with our gracious in-country host, Malaysia’s Kumpulan register cautious optimism as they noted new, albeit modest, Wang Persaraan (Diperbadankan) (KWAP). Our appropriately timed theme was focused signals of improvement in the U.S. economy, even while watching on Investing When Change is Fundamental. Andrew Sheng, president, Fung Global Institute policymakers in European capitals struggle to find solutions to a in Hong Kong, headlined the plenary sessions. Six workshops and a Master Class on risk deepening fiscal crisis complicated by political constraints. It was and asset allocation formed the core experience for participants from 22 countries and clear to all that a Sino-centric Asia, while dependent on the West representing 35 funds. for import markets, was becoming increasingly influential in capital and financial markets and important as long-term investors to the PPI realized a milestone with the award of a grant by the Asian Development Bank global economy. underwriting a pilot Asia Dialogue at the Bank’s headquarters in Manila, the Philippines. The Dialogue engaged two dozen pension managers from emerging markets together with Midway through the year, the Board of Directors of the Pacific PPI’s plan sponsor membership for intense discussions around investment and operational Joseph A. Dear. Chair, Board of Directors Pension Institute decided on a strategic direction for the Institute, strategies. The program tapped PPI’s Asian Network of pension funds and affiliates and reflecting a wider recognition of Asia’s growing importance in contributed thematically to both the Asian Pension Fund Roundtable workshop discussions capital and financial markets. The intention of the Pacific Strategy and our annual publication of Pension Snapshots. We also produced a set of emerging is to render the Institute more Asia-facing and more deeply engaged market, pension fund benchmarks as part of the database project, funded by the grant from in Asia by virtue of our programming and communications, our the ADB, an honorary member of the Institute. The work aided PPI’s efforts to extend membership and our governance. Looking forward toward full our community of pension funds and affiliates and to encourage deeper understanding implementation in 2013, PPI’s professional staff will design our of markets and best practices. To accomplish this, we returned again to PPI’s hallmark two annual North American roundtables and will add an Asian emphasis on learning by dialogue between and among international peers. Roundtable that is patterned on the North American meetings but in an Asian venue. Programming also will include two smaller-scale In addition to Snapshots 2011: Pensions in Asia, a compendium of information on pension meetings in Asia, the Asia Dialogue for primarily Asian pension funds in 22 Asian economies, PPI also published two editions of Briefs. managers, and the PPI Executive Seminar for the PPI membership. These were distributed to our membership along with roundtable program books and an array of electronic dispatches serving to connect PPI with our geographically As we embrace this new strategy, we will look both westward dispersed membership. In addition, our website, www.pacificpension.org, hosted timely and from North America and Europe and outward and globally from relevant information about our members, including edited video segments of the annual our vantage points in Beijing, Tokyo, Seoul, New Delhi, Singapore, Asian Pension Fund Roundtable. Hong Kong, Bangkok, Kuala Lumpur, Jakarta, Melbourne Marsha Vande-Berg, Chief Executive Officer and Sydney. We reached the end of this volatile year for markets with an ongoing sense of gratitude to our loyal membership. For this support, we continue to say thank you. The Membership and Program committees, chaired by Richelle Sugiyama and Barry Metzger, respectively, provided key Joseph A. Dear Marsha Vande-Berg support for our ongoing efforts to achieve controlled growth Chair, Board of Directors Chief Executive Officer in our membership and accomplish consistently high-caliber Pacific Pension Institute Pacific Pension Institute

1 2 Environment for Investment • Jeffrey Leonard, chief executive officer, Global • David Nelson, senior director of research and Environment Fund, and Min Tang, executive programs, Climate Policy Initiative, offered his Risk, Reward or Distraction? vice‐chairperson and president, YouChange New comprehensive views on the current environment for Philanthropy University, debated with facilitator investment and investment strategies. PPI convened the Winter Roundtable in Laguna Roy Doumani, Professor, University of California, 2011 Winter Roundtable Beach, California, around the theme of environmental • John Bryson, former chairman, chief executive Los Angeles, whether China and the United States officer and president of Edison International, investment. In attendance were institutional investors are in a footrace—or a marathon—in their pursuit February 23-25 discussed an array of clean energy technologies. He from 12 countries in North America, Asia and Europe. of support for green investments. Laguna Beach, California Collette Chilton, chief investment officer, Williams was introduced by D. Brooks Zug, senior managing College Investment Office, andJack Wadsworth, advisory • In two breakout sessions, Arjun Thapan, special senior director, HarbourVest Partners. Mr. Bryson was advisor to the president for infrastructure and water, named the Obama administration’s Secretary of director, Morgan Stanley and PPI director served Asia Development Bank, and Ajit Dayal, founder, Commerce following the Roundtable. as co-chairs. Quantum Advisors Private Ltd., reviewed water • Returning as a speaker for a second time, Peter security and markets. In the second session, Guang Robertson, former vice chair, Chevron Corporation, Yang, chairman and chief executive officer, Finergy HIGHLIGHTS joined Mikkal E. Herberg, research director, Energy Capital; Eugene Yun, founder and managing partner, • Doug Cogan, director, Climate Risk Management, Security Program, The National Bureau of Asian EOS Investment Partners; and John Campbell, senior MSCI Inc. and author of Investor Guide to Climate Research, to explore energy economics, markets and partner and founder, Campbell Lutyens & Co., Risk and The Greenhouse Gambit: Business and security issues related to existing energy supplies. offered perspectives on the outlook for infrastructure Investment Responses to Climate Change and Russell Hiscock, president and chief executive officer, investment in Asia. Subsequently, Mr. Campbell Roger Sit, chairman, chief executive officer and CN Investment Division, chaired the session. president, Sit Investment Associates, shared views and Mr. Dayal reported on their respective breakout • Adam Segal, Ira A. Lipman senior fellow for on the challenges and opportunities for returns sessions to the full Roundtable audience. counterterrorism and national security studies, related to investing in a sustainable environment. • Ragui Assaad, professor, Humphrey Institute of the Council on Foreign Relations, engaged in Public Affairs, University of Minnesota, briefed • Rob Lake, head of Sustainability and Governance, conversation with William Owens, partner and chief participants by videoconference on the political and APG Asset Management, Netherlands; Joaquim executive officer, AEA Investors (Asia), and former economic dimensions of the then unfolding Arab de Lima, global head of Quantitative Research vice chairman of the U.S. Joint Chiefs of Staff, on the Spring. Marsha Vande-Berg, PPI chief executive for Equities, HSBC; and Farouki Majeed, senior topic of cyber-security. investment officer, California Public Employees’ officer, chaired the session. Retirement System, provided pension funds’ perspectives on investing in climate change projects as an investment strategy. Lisa Mazzocco, chief investment officer, Los Angeles County Employees Retirement Association, facilitated the session. • Peter Liu, co‐founder, Clean Energy Advantage Partners and founder and vice‐chairman, New Resource Bank; Susan Payne, founding chief executive officer, Emergent Asset Management; Gary Rieschel, managing director, Qiming Venture Partner; and facilitator Varel Freeman, first vice president, European Bank for Reconstruction and Development, discussed funding strategies for green investing.

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MANILA DIALOGUE Manila, Philippines April 13-14, 2011

HIGHLIGHTS The Asian Network Asian Network Annual Dinner 2011 Manila Dialogue PACIFIC • The Manila Dialogue program began with a reception PPI develops deep connections with pension managers November 9 April 13-14 and dinner, followed by welcoming remarksPENSION from Philip throughout Asia and the Pacific Rim as we seek to provide Kuala Lumpur, Malaysia Erquiaga, director-general, Private SectorINSTITUTE Operations Manila, Philippines service as an informational bridge between East and West. Department, Asian Development Bank, and Barry The Asian Network Annual invitation-only dinner These connections expand our understanding of the issues Metzger, partner, Baker & McKenzie and former ADB convenes pension fund executives from Asia, Europe and relevant to Asian pension systems and translate into a larger general counsel. North America, together with PPI’s Board of Directors, Crisis and Recovery understanding for our membership of the investment • Bindu Lohani, vice president, Finance and for an interactive dialogue on subjects specifically relevant environment in Asia generally. We refer to this group of Uncertainty in the West, Administration, Asian Development Bank, opened to pension managers. Richelle Sugiyama, investment managers collectively as the Asian Network. The Network the Dialogue with an economic overview of Asia and officer, Public Employees Retirement System, Idaho, Implications for the East is invited to take part in the planning of Asian Pension a discussion of the roles that pension funds and social invited the participants to share their views on topics Fund Roundtables, in particular the workshops that are Pension funds are critical to the ongoing evolution of security play in the region’s development. that are of immediate concern for their respective funds. a core component of the roundtable. With underwriting Asia’s economies, including the promotion of inclusive Barry Metzger, partner, Baker & McKenzie, provided an • The program featured a conversation about investment from corporate sponsorships, PPI also is able to extend growth within the region. As fiduciaries, pension funds and operational strategies in five areas. Each segment introduction to the discussions, setting the stage for the scholarships to facilitate roundtable participation to various can mobilize and also safeguard the retirement savings was led by two delegates, one each from developed and Asian Pension Fund Roundtable that followed. pension managers who are a part of the Asian Network. of a domestic workforce. As long-term investors, developing economies. pension funds contribute to the evolution of sustainable 1. Asset Allocation & Investment Strategy capital markets. They also can be powerful advocates 2. Alternative Investments for transparency and strong corporate governance 3. Risk Management standards. As social security arrangements, pension 4. Pension Fund Governance funds are frequently the only resource for old-age 5. Pension Fund Demographics support. This critical role is amplified by an overall decline in the traditional role of the family as caretaker • A best practices scorecard invited delegates to assess their of the elderly. organizations’ respective application of the best practices that were discussed. The results provided deep insight PPI, together with the Asian Development Bank into the investment and operational characteristics of (ADB), convened the inaugural 2011 Manila Dialogue. funds that are central to the emerging Asian economy. Twenty-five participants from developing and developed The diversity in both thinking and approach to best countries who represented pension funds, regulators practices and in the application of strategies was also and academic institutions, took part in the day-long hightlighted. discussion. The Manila Dialogue was made possible • A part of the Dialogue included breakout discussions on under an ADB grant. The Bank is an honorary member best practices, which were discussed in an effort to arrive of the PPI and an active participant in our programs at consensus on key principles, such as transparency, 3 and activities. diversification, risk-budgeting and asset allocation. This consensus then informed an outline of the practices for PACIFIC future discussions. PENSION INSTITUTE Photos from Manila Dialogue Manila from Photos

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2 On Asia’s Southern Rim: fund manager, Corston-Smith Asset Management, Alberta Investment Management Corporation, shared facilitated the session. their respective thinking on investing in the region’s Perspectives on India, emerging markets. Southeast Asia and Oceania • Nicholas Hope, director, Stanford Center for 2011 Summer Roundtable International Development engaged William Overholt, • Chas W. Freeman, Jr., former U.S. Ambassador to Saudi Institutional investors attending the 2011 Summer senior research fellow, Ash Center for Democratic Arabia and chairman, Projects International, briefed Governance, Harvard Kennedy School, in a Roundtable participants on what he described as the Roundtable in Vancouver, British Columbia, focused July 13-15 conversation about the prospective leadership changes in new strategic geometry of South Asia. Ambassador their discussions on the southern rim of Asia, reaching China in 2012 and 2013. Freeman is a lifetime member of PPI and a frequent Vancouver, British Columbia from India across Southeast Asia and including Australia speaker at PPI North American roundtables. and New Zealand. Peter Sullivan, senior advisor, • Three panelists gave their perspectives on the Lombard Investments and Bryan Thomson, vice opportunities and risk factors involved with investing • Nicholas Hope, director, Stanford Center for president, Equity Investments, British Columbia in five countries bordering the southern rim of Asia. International Development, concluded the sessions with Speaking on India: Jonathon Bond, partner, Actis his comprehensive overview of the discussions. Investment Management Corporation (bcIMC), chaired LLP. On the frontier markets of Cambodia, Laos the Roundtable. • Eric Best, founder and president, Best Partners S.C., and Vietnam: Taizo Ishida, lead portfolio manager, engaged Roundtable participants in a scenario- Matthews Asia Growth Fund. On Indonesia: Andreas planning exercise to identify points of agreement and Sylverius, investment officer, International Finance HIGHLIGHTS disagreement about the outlook for markets and the Corporation. Ta-lin Hsu, chairman, H&Q Asia Pacific, • Donald K. Emmerson, professor, Stanford University, global economy. The discussion followed along two lines facilitated the discussion. director, Southeast Asia Forum and faculty affiliate, of thinking, with the first centering on the relationship Abbasi Program in Islamic Studies and Clyde • Providing a plan sponsor perspective from North between the United States and China and the second, Prestowitz, founder and president, Economic Strategy America, Gordon Fyfe, president and chief executive between global monetary and fiscal management. Institute and a returning speaker, addressed the officer, Public Sector Pension Investment Board; Mr. Best’s report on the outcomes pointed to a challenging aspects of diversity and regionalism in key Christopher Ailman, chief investment officer, California consensus among participants that anticipated ongoing southeastern rim countries. Marsha Vande-Berg, PPI State Teachers’ Retirement System; and Leo de Bever, difficulties in key sectors of the global economy, as well chief executive officer, facilitated the dialogue. chief executive officer and chief investment officer, as uncertainty in the critical big-power relationship • The twin issues of competition and connectivity within between the United States and China. the region were addressed in back-to-back sessions. Steven Weddle, executive director, J.P. Morgan Asset Management, Real Assets Group, Prinn Panitchpakdi, senior regional equity manager, CLSA Ltd., and Keith Head, professor, University of British Columbia, Sauder School of Business spoke during the first session on the myriad aspects raised by the discussion topic. Teresa Barger, co-founder and senior managing director, Cartica Capital, facilitated, sharing her insights on infrastructure, commodities and trade. • The second session on competition and connectivity featured a discussion on capital markets and financial services. Iwan J. Azis, head, Office of Regional Economic Integration, Asian Development Bank and Praveen Kadle, managing director and chief executive officer, Tata Capital, provided insightful perspectives.

Shireen Muhiudeen, managing director and principal Howard Chao, O’Melveny & Myers, LLP (l-r) Barry Metzger, Baker & McKenzie; Eric Best, Best Partners; Akiyoshi Oba, Tokio Marine Asset Management; Hiro Kasai, Tokio Marine Asset Management 7 8 2011 Pacific Pension Institute Executive Seminar

IndIa India: Investment Risks and • Praveen Kadle, managing director and chief executive • Subir Gokarn, deputy governor, Reserve Bank of India, Investment Risks Opportunities in South Asia officer, Tata Capital, reviewed the challenges for both shared his views on monetary and fiscal policy, as well as & Opportunities in South asia domestic and foreign multinationals in India. the outlook for ongoing reform. 2011 PPI Executive Seminar The seventh annual PPI Executive Seminar (PES) • CB Bhave, former chairman, Securities and Exchange • A spirited discussion on the role technology can play in engaged a dozen PPI institutional investor members in Board of India (SEBI), provided a regulator’s perspective improving India’s educational system, as well as providing November 2-9Nov. 2-9 Mumbai • New Delhi • Kualaa series ofLumpur high-level discussions about this emerging on the challenges of regulating India’s securities markets access to financial services and technical assistance, was market’s relationship to the larger Asian region and the and his views on the current status of capital market led by Vijay Mahajan, managing director, BASIX, and Mumbai and New Delhi, India world. Delegates had four days of meetings in Mumbai reforms. Ajay Batra, national head, Institute for Assessment and and New Delhi, separated by a weekend visit to the Accreditation, the Azim Premji Foundation. • Following a tour of the electronic National Stock Kuala Lumpur, Malaysia Taj Mahal in Agra. The 220 kilometer trip by mini-van Exchange, Ravi Narain, managing director and chief • T V Mohandas Pai, with Manipal University and former provided a panoramic picture of the effects of the rapid executive officer, talked with the delegation about the director and chief financial officer of Infosys, offered an urbanization taking place in northern India. In New outlook for foreign institutional investment in India’s inspired and enthusiastic assessment of India’s reform Delhi, delegates were invited to visit the Eternal Gandhi market and the need for a deeper corporate bond market. agenda. Multimedia Museum. They were received a VIP tour by Sailaja Gullapalli, research associate, and a separate tour by • Ambassador Rajendra Abhyankar, director, Center • Roopa Purushothaman, head of Research, Everstone H one of the last surviving witnesses of Mahatma Gandhi’s for West Asian Studies, Jamia Millia Islamia; former Capital Advisors and an author of the Goldman Sachs, New Delhi assassination in 1948. secretary, Ministry of External Affairs; India and former BRIC report; MK Sinha, president and chief executive India ambassador to the European Union, offered his officer, IDFC Project Equity Company; and Vishal The seminar concluded in Kuala Lumpur with a lunch thinking on India’s role in the region and globally. Mahadevia, managing director, Mumbai, Warburg meeting high in the famous Petronas Towers that Pincus Private, briefed the delegation on the challenges overlooked the city. Datuk Ranjit Ajit Singh, managing • Ajay Nanavati, chief executive officer and managing of infrastructure investment and director, Securities Commission of Malaysia, led the director, 3M India Ltd. and Rahul Bhasin, managing investment generally. discussion, which was chaired by Shireen Muhiudeen, partner, Baring Private Equity Partners India, offered managing director, Corston-Smith Asset Management. perspectives on doing business in India’s domestic • Members of the delegation met with Yogesh Agarwal, markets. chairman of the Pension Fund Regulatory and The program’s gracious in-country hosts were PPI member, Development Authority (PFRDA), from whom they Quantum Advisors Private, Ltd., represented by Ajit Dayal, • Siddharth Kapur, chief executive officer, UTV Software learned about India’s fledgling efforts at a nationwide founder, and IV Subramaniam, chief executive officer and Communications, a subsidiary of Walt Disney India, pension system. chief investment officer. PPI remains grateful for the effort and Rama Bijapurkar, independent market strategist, and kindness they extended to the delegates throughout gave a timely overview of the ways India’s media and J the journey. entertainment industries are encouraging an expansion Mumbai of India’s growing middle class of consumers. HIGHLIGHTS • Mahesh Vyas, managing director and chief executive (back row, l-r) Margot Wirth, California State Teachers’ Retirement System; IV (Subbu) officer, Centre for Monitoring Indian Economy, reflected Subramaniam, Quantum Advisors Private on India’s two decades of reforms in a conversation led by Ltd.; Richelle Sugiyama, Public Employees Ajit Dayal, founder, Quantum Advisors Private Ltd. Retirement System, Idaho; Bryan Thomson, British Columbia Investment Management • In his role as vice chairman and chief executive officer Corporation; Tomas Franzen, AP Fonden 2, Sweden; Jesus Arguelles, California Public of the Housing Development Finance Corporation, one Employees’ Retirement System; Collette Chilton, of India’s cornerstone financial institutions, Keki Mistry Williams College Investment Office. provided an insider’s perspective on India’s capital and (front row, l-r) Jim Sherwin, Employees’ financial markets. This included his outlook for banking, Retirement System, Texas; Ajit Dayal, Quantum Advisors Private Ltd.; Marsha Vande-Berg, PPI; housing, mortgage and land policies. Geoffrey Hirt, DePaul University; Josh Jacob, Hamilton Lane Advisors

9 10 Investing When • Joseph Dear, chief investment officer, California perspectives were Khairul Azwa Kamalul Bahrin, Public Employees’ Retirement System, and Anton director and head of Risk Management and 2011 Asian Pension Change is Fundamental Periquet, chairman, Pacific Main Holdings, brought Compliance, KWAP; Michael Friedlander, chief risk practitioners’ perspectives to the discussion about the officer, APG Asset Management Asia; Kyungjik Lee, The landscape for institutional investors continued to Fund Roundtable global economy and highlighted the need for ongoing head of Global Equities, National Pension Service, be marked by volatility and uncertainty. Assessments November 10-11 investment in emerging markets. Korea; Terry McCredden, chief executive officer, on how to effectively manage risk was the focus of UniSuper, Australia; Jim Sherwin, director of Public • Howard Chao, partner, O’Melveny & Myers, chaired PPI’s ninth annual Asian Pension Fund Roundtable. Equities, Employees Retirement System of Texas; Kuala Lumpur, Malaysia a panel on the outlook within Asia. Participating The Roundtable convened 150 delegates representing and Don Yeo, deputy to the Chief Executive Officer, in the discussion were Doug Pearce, chief executive 35 pension funds from 22 countries. They gathered Central Provident Fund, Singapore. officer and chief investment officer, British Columbia to engage with one another and exchange ideas and Investment Management Corp.; Sandiaga Uno, • Donald K. Emmerson, professor, Stanford University; concerns about today’s marketplace and the investment founder, Saratoga Capital; and Jiming Ha, vice director, Southeast Asia Forum; faculty affiliate, strategies that can best address the uncertainty and chairman and chief investment strategist, China, Center on Democracy, Development, and the Rule volatility. Co-chairs, Dato’ Azian Binti Mohd Noh, chief Goldman Sachs. of Law; was joined by Karim Raslan, founder and executive officer, Kumpulan Wang Persaraan (KWAP) chief executive officer, KRA Group; author and • Two consecutive rounds of workshops addressed the (Diperbadankan), and Bindu Lohani, vice president, commentator on Asian affairs, in a lively, after-dinner following topics: finance and administration, Asian Development Bank, debate on the conceptions and misconceptions of the led participants through the program. KWAP, which ◊ Infrastructure Investment: Challenges of the Asian East and West about one another. Marsha Vande- manages the pension fund for Malaysia’s public sector Marketplace Berg, PPI’s chief executive officer, served as facilitator. employees, was our in-country host. ◊ Currency Strategies: How to Manage in the • Andrew Sheng, president, Fung Global Institute Context of Volatile Markets and Financial and former chairman, Securities and Futures Those corporate sponsors who underwrote this year’s Instability Commission, addressed the full roundtable about Asian Pension Fund Roundtable were Goldman Sachs the need for pension fund reform. The session was Asset Management, Nomura Asset Management, ◊ Managing Pension Funds and Family Offices in Today’s Globally Connected Financial Markets chaired by Gordon Fyfe, president and chief executive Tokio Marine Asset Management, together with Tokio officer, Public Sector Pension Investment. Marine Capital and DIAM. O’Melveny & Myers ◊ Today’s Optimum Portfolio: Comparative Richard Jackson helped underwrite the reception and dinner on Perspectives from Asia and North America • , director and senior fellow, Center for Strategic & International Studies, returned as a Thursday evening. ◊ Guiding Principles for Investment: Governance, PPI speaker to discuss demographic challenges facing Environment and Sharia Asia’s pension systems. He was joined by Theresa HIGHLIGHTS ◊ Why Actuaries are important to the Process of Whitmarsh, executive director, Washington State • In his opening remarks, Malaysia’s Deputy Portfolio Management Investment Board. Minister of Finance, Senator Dato’ Dr. Awang Adek • Ashby Monk, research director, Collaboratory for • Ben Simpfendorfer, associate, Global Strategic Hussin, spoke to the issues of financial uncertainty, Research on Global Projects, Stanford University, led Associates, also returned for a second engagement global integration, and demographic change. The this year’s Master Class on strategies for institutional as a PPI Roundtable speaker, taking the discussion minister pointed to the demands that are the result investors. Mr. Monk’s remarks on risk and pension into the broader realm of historic linkages now of living in a new normal environment and stressed investment strategy set the context for the ensuing being renewed between Asia and the Middle East. the need to accelerate the pace of reform and discussion led by Annie Koh, Associate Professor Mr. Simpfendorfer was joined by Teresa Barger, senior transformation. of Finance & Dean of the Office of Executive & managing director, Cartica Capital, who facilitated Professional Education, Singapore Management the session. University. Offering a set of wide geographical

11 12 Membership Service, Roundtable Programming Communications and Outreach and Fiduciary Education

In support of our programs and educational mission, PPI’s Roundtables are the culmination of the efforts of a large number of PPI’s communication efforts strive to provide individuals who willingly and enthusiastically contribute their knowledge, timely and informative content to our culturally expertise and insights about the topics and themes that are featured in our diverse and geographically dispersed audience of programs. The starting point in the planning of each roundtable begins members, organizational partners and Roundtable with an effort to identify the ways we can deepen institutional investors’ participants. Kris Greenville, membership officer and understanding of the myriad issues that are driving investment decisions. communications director, oversees the production and To that end, PPI invites subject matter experts in business, finance, distribution of video, digital and print media. diplomacy, politics and government and the academy to lend their perspectives to the discussion at our annual programs in North America and in Asia. Together with Roundtable participants, they contribute to PPI’s hallmark emphasis on learning through dialogue.

2011 PUBLICATIONS AND The two annual North American Roundtables are members-only events.The 2011 ROUNDTABLES Roundtable discussion observes the Chatham House Rule requiring that COMMUNICATIONS there be no attribution of remarks by speakers or participants. Roundtable AND OTHER PROGRAMS ◆◆ Program books for the Winter, Summer, and participants also are expected to observe PPI’s no-marketing policy. ◆◆ Winter and Summer Roundtables Asian Pension Fund Roundtable, as well as The Asian Pension Fund Roundtable takes place in various Asian venues. ◆◆ Manila Dialogue for the PPI Executive Seminar The program is open to plan sponsors and senior-level institutional ◆◆ PPI Executive Seminar ◆◆ The Kuala Lumpur Report, a synopsis of the investment managers, but with priority given to those who are part of PPI’s proceedings at the 2011 Asian Pension Fund Asian Network. ◆◆ Asian Network Dinner Roundtable ◆◆ Asian Pension Fund Roundtable A report of the highlights of the proceedings at the Asian Pension Fund ◆◆ Video segments of the 2011 Asian Pension Roundtable is published and distributed to participants, as well as PPI’s full Fund Roundtable membership. Additionally, videotaped segments of the plenary sessions are ◆◆ Snapshots, 2011 Pensions in Asia, posted on PPI’s website, www.pacificpension.org, to provide representing enterprising work collecting data a wider PPI audience with access to the proceedings. from primary sources and interviews with The PPI Executive Seminar takes place prior to the Asian Pension Fund pension managers in the region Roundtable, resulting in the participation of a number of North American ◆◆ The 2010 Annual Report plan sponsors in the Asian Roundtable. The Asian Network Dinner, an ◆◆ PPI’s Website: www.pacificpension.org invitation-only event for plan sponsor members of PPI, is held the evening before the Asian Pension Fund Roundtable’s opening gavel. ◆◆ Institutional Investor Briefs Member Newsletter, Volumes 11 and 12 PPI is committed to ensuring a free, open and unbiased exchange of ◆◆ PPI Member News email communications ideas and information relevant to the plan sponsor and asset management community. To further open exchange of ideas and issues, PPI insists on a marketing-free environment at our Roundtables and requires that all participants abide by our no-marketing policy. 13 14 Administration and Finance PPI’s professional staff operates as a tightly knit team under the Pacific Pension Institute direction of the chief executive officer. Key functional areas of the STATEMENT OF ACTIVITIES organization are programming and communications, along with FOR THE YEAR ENDED DECEMBER 31, 2011 finance and human resources. With Comparative Totals for the Year Ended December 31, 2010 Sabina Gotuaco, finance and human resources director, oversees the organization’s finances, administers payroll and the employee benefits program. She also has responsibility for developing a set of metrics TOTAL 2011 TOTAL 2010 for tracking and analyzing data. REVENUE Membership Dues 1,270,750 $ 1,146,250 Gwen Bough serves as assistant to the chief executive officer, and Meeting Registration 146,989 136,464 supports the activities of the Board of Directors and coordination of our record-keeping. Pension Executive Seminar, Asia 44,000 33,600 Investment Income 20,288 43,221 PPI Intern Program Asian Development Bank Grant 141,208 -- PPI’s intern program is coordinated by Ms. Bough to lend support Other Income -- 1,967 to PPI’s staff by the undertaking of the myriad clerical duties that are part of our operation. The program was formalized as part of Total Revenue 1,623,235 1,361,502 PPI’s operations four years ago. In 2011, we saw our first intern, Megan Graves, leave to pursue her studies at Amherst College. SUPPORT Contributions 150,000 255,000 In-Kind Donations 4,785 33,174 Partnerships Total Support 154,785 288,174 As a way of extending our reach and deepening our connections, Total Revenue and Support 1,778,020 1,649,676 PPI partners with organizations whose purposes and organizational strengths align with our educational mission. EXPENSES In 2011, PPI received a grant from the Asian Development Bank to Program Services 1,288,746 1,204,137 provide programming for institutional investors in developing Asia. Support Services 416,400 375,138 The ADB’s funding enabled PPI to once again utilize our expertise in organizing a highly interactive, educational program in the form Total Expenses 1,705,146 1,579,275 of the 2011 Manila Dialogue. The grant also helped underwrite the creation of a set of Asian pension fund benchmarks as part of an CHANGE IN NET ASSETS 72,874 70,401 online database cataloguing the demographic profile, investment and operational strategies and the regulatory structure for each of 22 Asian NET ASSETS–AT BEGINNING OF YEAR 1,586,938 1,516,537 funds. PPI owes a special thank you to C. Lawrence Greenwood, Jr., then ADB vice president, Operations 2, for his expert guidance in NET ASSETS–AT END OF YEAR $1,659,812 1,586,938 the grant application process. Mr. Greenwood was a member of PPI’s Advisory Council until his departure from the Bank. PPI also maintains an ongoing exchange with the RAND Center for Asia Pacific Policy (CAPP), recognizing CAPP as an honorary member Note: The financial information presented is from the audited financial statements. Interested parties of PPI. Marsha Vande-Berg, PPI’s chief executive officer, serves on the can obtain a complete copy of the calendar year audited financial statements by contacting our office. RAND CAPP Advisory Board.

15 16 BOARD OF DIRECTORS OUR MEMBERSHIP PPI’S NEW MEMBERS IN 2011 Chair Ronald E. Bornstein Barry Metzger Advisory Council Public/Private Pension Fund, Corporate Members Friends of PPI Joseph A. Dear Pillsbury Winthrop Shaw Baker & McKenzie LLP , AEA Investors (Asia) Ltd. Ronald E. Bornstein, Pillsbury Winthrop California Public Employees’ Pittman LLP Chair Ron Schmitz Roy Doumani Endowment & Foundation Shaw Pittman LLP Retirement System Affinity Equity Partners Ltd. John Campbell Oregon State Treasury University of California, Los Angeles Members Paul Costello, formerly with FutureFund, AustralianSuper Campbell Lutyens & Co., Ltd. through November, 2011 Albright Capital Management LLC Vice Chair Teresa C. Barger Abu Dhabi Investment Authority Australia Gordon J. Fyfe AllianceBernstein Nancy C. Everett Kazuo Seki Cartica Capital LLC Alberta Investment Management William D. Crist, Governance for Owners Public Sector Pension BlackRock Inc. Mitsubishi UFJ Lease Corporation Angelo, Gordon & Co. Investment Board Christopher K. B. Brotchie Roy Doumani, University of California, & Finance Co., Ltd. Asia Alternatives Management LLC Wayne Kozun Baring Private Equity Partners APG Asset Management Asia Los Angeles Secretary Ontario Teachers’ Pension Plan Board Richelle Sugiyama Baker & McKenzie LLP APG Asset Management Ta-lin Hsu William D. Crist AustralianSuper Nancy C. Everett, BlackRock Inc. Public Employee Retirement System Baring Private Equity Partners Melissa Ma Governance for Owners British Columbia Investment Geoffrey A. Hirt, DePaul University H&Q Asia Pacific of Idaho Asia Alternatives Management, LLC Management Corporation Campbell Lutyens & Co., Ltd. H. Lawrence Hull, Jr. Howard L. Hull III, HLH Securities Interim Treasurer John S. Wadsworth, Jr. Priya S. Mathur Larco Advisors, Inc. California Public Employees’ Capital International Inc./ Takeshi Kadota, Kadota & Co. Shelley I. Smith Morgan Stanley California Public Employees’ Retirement System Capital Guardian Trust Co. formerly with Los Angeles City Takeshi Kadota JETRO, New York Commonfund Capital Employees’ Retirement System Retirement System Garrett A. Walls California State Teachers’ Cartica Capital LLC Kadota & Co. Global Strategic Associates Angelo, Gordon & Co. Retirement System Ambassador Clark T. (Sandy) Randt Christopher J. Ailman Robert M. Maynard Commonfund Capital through July, 2011 Herb Meiberger formerly with U.S. Department of State California State Teachers’ Public Employee Retirement System Canada Pension Plan Investment Board Corston-Smith Asset Management City and County of San Francisco Shelley I. Smith, formerly with Los Angeles Retirement System of Idaho Theresa Whitmarsh Employees’ Retirement System City and County of San Francisco DIAM Co., Ltd. City Employees’ Retirement System Washington State Investment Board Employees’ Retirement System Oliver Bolitho Lisa Mazzocco Doug Pearce Dimensional Fund Advisors, Inc. Robert D. Storer, formerly with Alaska Goldman Sachs (Asia) LLC University of Southern California Founder, Chairman Emeritus CN Investment Division British Columbia Investment FountainVest Partners (Asia) Ltd. Permanent Fund Corporation Affinity Equity Partners (HK) Ltd. Endowment H. Lawrence Hull, Jr. Management Corporation Colorado Public Employees’ Peter H. Sullivan, Lombard Investments, Inc. Larco Advisors, Inc. Retirement Association Global Strategic Associates, LLC James R. Timmins Yuelin T. Yang, IMC Corp Ltd. Employees Retirement System of Texas Goldman Sachs Highstar Capital, LP Future Fund, Australia Grove Street Advisors Honorary Members Ambassador Linda Tsao Yang Hamilton Lane Advisors Asian Corporate Governance Association Government Pension Fund, Thailand Asian Development Bank Sumitomo Trust & Banking Co., Ltd. Kaiser Permanente H&Q Asia Pacific European Bank for Reconstruction Los Angeles City Employees’ HarbourVest Partners and Development Retirement System Highstar Capital, LP Ambassador Kihwan Kim PPI MANAGEMENT AND STAFF BOARD OF DIRECTORS AS OF DECEMBER 2011 Los Angeles County Employees IDFC Ltd. Distinguished Visiting Scholar Korea Development Institute Retirement Association Institutional Real Estate, Inc. Marsha Vande-Berg, Ph. D. Lawrence J. Lau, Chairman Chief Executive Officer Municipal Employees’ Retirement System JPMorgan Asset Management of Michigan CIC International, Hong Kong, Co., Ltd. Kohlberg Kravis Roberts Asia Ltd. National Council for Social Security Fund, National Council on Teacher Retirement Loomis Sayles & Company China RAND Center for Asia Pacific Policy Gwen Bough Macquarie Capital (USA) Inc. Assistant to the CEO National Pension and Provident Fund, The World Bank Group/ Bhutan Mitsubishi Corporation International Finance Corporation National Pension Service, Korea Morgan Stanley Lifetime Members National Railroad Retirement Nomura Asset Management Co., Ltd. Heidi Young Ambassador Chas W. Freeman Jr. Chairman, Program Director Investment Trust Oaktree Capital Management, LP Projects International Ontario Teachers’ Pension Plan Board O’Melveny & Myers LLP H. Lawrence Hull, Jr. Oregon State Treasury Primavera Capital Group President, Larco Advisors, Inc. Kris Greenville Pension Fund Association, Japan Quantum Advisors Pvt. Ltd./ Charles P. Valdes. Sacramento, CA Membership & Primary Real Estate Advisors Pvt., Ltd. Communications Director Public Employee Retirement System Ambassador Linda Tsao Yang, Chair of Idaho Siguler Guff & Company Asian Corporate Governance Association Public Sector Pension Investment Board, Sit Investment Associates, Inc. Sabina Ong Gotuaco Canada Finance & Administration/ Squadron Capital Management Ltd. Second Swedish National Pension Fund– Human Resources Officer Sumitomo Trust & Banking Co., Ltd. AP2 Sweden Tokio Marine Asset Management Co., Ltd./ The work of the Board of Directors is supported by six standing committees. Each committee is led by Virginia Retirement System Kathy Song Tokio Marine Capital Co., Ltd. Administrative Assistant a PPI director. Standing committee chairs in 2011 were Wayne Kozun, Audit Committee; Shelley Smith, Washington State Investment Board Budget and Finance Committee; Gordon Fyfe, Compensation Committee; Richelle Sugiyama, Membership Williams College Investment Office Committee; Barry Metzger, Program Committee; and Ta-lin Hsu, Nominations and Elections Committee. 17 18 Acknowledgements PPI would like to acknowledge the ongoing support of our plan sponsor members in the United States, Canada, Europe, Asia and Australia. Organizationally and individually, each remained engaged and committed throughout 2011. In Memory PPI wishes to declare our admiration for the fortitude and resilience each of our Japanese members showed in the aftermath of an overwhelming natural disaster and the ensuing nuclear catastrophe Special Thanks Matthew K. Fong, long-time at the Fukashima Nuclear Power Plant in March 2011. friend and member, passed away Baker & McKenzie is deserving of a thank you in June 1, 2011, after a long We also invite our entire membership to join us in acknowledging again this year for their ongoing pro bono legal battle with cancer. Matt was an the contribution to PPI of H. Lawrence (Larry) Hull, Jr. Mr. Hull support of the organization. A PPI member since ardent supporter of PPI serving was elected Chairman Emeritus by the Board of Directors in 2011. 2005, Baker & McKenzie is an international law on the Advisory Council and He is the founder and a Lifetime Member of PPI. firm with expertise and experience in Asia. as a co-chair of the 2007 Winter Roundtable. He was 57 years old.

PPI speaker and colleague, Robert A. Scalapino, the Robson Research Professor of Government emeritus at the University of California, Berkeley, and a renowned expert in the field of East Asian studies, died November 1, 2011, of complications from a respiratory infection. He was 92 years old.

Asian Pension Fund Roundtable participants were treated to a cultural performance sponsored by our in-country hosts, Kumpulan Wang Persaraan (Diperbadankan). The colorful and uniquely dressed performers of the prestigious Istana Budaya Theatre troop

Selected photos in book courtesty of Young Heidi and Sugiyama Richelle were symbolic of Malaysia’s multiculturalism and rich historical heritages. 19 20 PACIFIC PENSION INSTITUTE

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