Chief Executive Officer, EMEA
Jones Lang LaSalle
After a typically busy Davos breakfast, the morning adrenaline rush really kicked in with a quick sub-zero dash between venues in time for my 8am in a very lively work shop debate called Harnessing the hype: Sustainable and impact investing. This was two hours of truly formative thinking and I was greatly impressed by the contributions of my fellow panellists and the opening speakers who included Muhammad Yunus, chairman of the Yunus Centre, based in Bangladesh.
Impact investing is rapidly emerging as a significant asset class, perhaps worth over $1tn within the next decade. From the real estate perspective, this is exactly what our global sustainability experts have been advising our clients – and telling us. I can tell you we are listening – in fact, everyone in the room this morning seemed switched on to the imperative of tackling three major questions: 1) how to meet increasing expectations for social as well as financial returns, 2) how to leap the hurdles that can slow impact investment, and 3) how to design investment strategies that do well by doing good. This will soon become a mainstream priority within the real estate sector.
Where next for capital markets?
Then it was my turn in the chair to moderate a lunchtime session on Reinvigorating capital markets for infrastructure and real estate. Against the backdrop of sovereign debt worries, hamstrung political systems and fragile areas of economic recovery, we asked what new models can real estate capital markets turn to; what new investment structures and capital sources mean for long-term sustainable development and how future bubbles can be detected and mitigated.
Two wonderful opening speakers set the stage: Professor Markus Brunnermeier of Princeton University and Professor Nouriel Roubini of the Leonard N Stern School of Business in New York, and we also heard fascinating insights on China from Professor Deng Yongheng teaching at the National University of Singapore. Highly relevant to this debate, Jones Lang LaSalle also contributed some topical thinking on identifying and managing systemic risk, part of our role in building the agenda for these World Economic Forum real estate and urban development sessions. Unfortunately the panel debate did not come up with ground-breaking new ideas. Markets around the world are in different cycles. Some are close to overheating, some have plenty of finance and some are facing a severe credit crunch.
Best practice from the UK
After Angela Merkel’s opening address yesterday, Britain’s David Cameron, took to the conference platform here today calling for bold and decisive action from his fellow EU leaders in resolving the Eurozone financial crisis. Unfortunately I could not attend, but that is part of the Davos challenge. You have so many fascinating choices that you often wish you might be in two places at once. Talking about choices, yesterday evening I chose to accept a dinner invitation from Barclays Bank. Quite dangerous, as it was taking place high up on Schatzalp, not an easy place to run away from if you don’t enjoy it. What can I say, it was fantastic. Good food, great company at the table but clearly the highlight was London’s mayor Boris Johnson. He took questions from Bob Diamond, Barclays’ CEO, as well as from the dinner guests and he was outstanding. Still, carrying a German passport, I have to say that I almost got a little jealous, as I haven’t met a mayor like that in Germany yet.
I was so impressed that this afternoon I took a very long walk (transportation isn’t that great at Davos) in order to get to the UK afternoon tea invitation, hoping to have more of Boris or at least find a Boris bike to get back to the Congress Centre afterwards. Neither were to be found, so I had to walk again and soon after I was passed by David Cameron, walking without a coat in the middle of January and his Brooks deep in the muddy, melting snow of Davos mainstreet. No challenge can be too big for the UK with such a brave leader.
The New Europe
Certainly the highlight of the day was my final session. Remodelling Europe, another workshop session, where you picked your table and worked in groups of 6 on ideas to improve Europe. Each table had a moderator, which included the Dutch prime minister, the Swedish minister of foreign affairs and other high ranked European politicians or business leaders. What a great experience and more importantly the tone was very positive. The belief in Europe’s ability to overcome its challenges was strong. Again best practice came into play, just as Mrs Merkel proposed yesterday. Different to her, one table was prepared to give examples of best practices for most European countries. I could fully buy into taking Finland’s efforts around scaling up the educational system, I was a bit disappointed that Germany was just being described as offering great engineers. What really caught me by surprise was that for Spain they came up with “best in class in football” and for Italy even shorter “best pasta”. Not that I would not agree, but none of the Spanish or Italians in the room jumped up to argue the description. Maybe they thought, at least we made the list. Greece wasn’t mentioned at all.