Some capital market investors — sovereign wealth funds, public and private pension plans, universities, and endowments — have longer investment horizons than others. They may differ from investors with shorter horizons in many ways: in their approach to risk, in their engagement with the firms that they invest in, and in their overall investment objectives.

Recent events have raised a host of new challenges for long-term investors. The expected return on some asset classes appears to have declined, most evidently for relatively safe long-term assets. This has pushed some investors to reach for returns by increasing the risk levels in their portfolios. At the same time, valuations in some equity markets are near all-time highs. These developments challenge long-term investors and raise questions about whether their future returns will match the average returns that they have earned in the last few decades. The NBER, with the support of the Norwegian Finance Initiative, has convened a series of conferences to explore long-term asset management. These meetings have brought together researchers who are exploring the theory and practice of long-term investing. The conference, held in London on May 18-19, 2017, was the second in this series. The researchers who gathered at this meeting examined a range of issues that are important for long-horizon investors, including the market implications of the growing importance of institutional investors, the role of informed and less-informed traders in the determination of securities prices and market dynamics, and the role of new financial instruments in affecting asset market equilibrium.