Q-A #1: Where can I read up on the scenario approach?

Genevieve Signoret

(Hay una versión en español de este artículo aquí.)

We have 42% more wealth management clients and private equity[1] investors than we had a year ago. Moreover, now that I’m vaccinated and boosted, I’m back in circulation as a speaker. Finally, I’m back to blogging, and blogging invites questions. As a result and to my delight, client, audience, and reader questions are flying at me faster than ever. So I thought I’d start publishing a series called Q-A to contain the best of your questions and my responses, for all to see. This is our first edition.

Q: I love your scenario approach. How can I learn to apply something like it in my work?

A: We adapted our approach from the scenario-based approach to strategic planning launched originally by Shell back in the 1960s. Our approach differs from that of Shell in that our team is small, and we project out only two years rather than 25 years. But we do try to consult thinkers from a variety of fields and use our scenarios to design portfolio strategies to be robust under a variety of possible futures.

We learned the method as applied to strategic planning through two books before adapting it to macro forecasting. One of the books is breezy and light, though not very detailed. It’s called The Art of the Long View:  Planning for the Future in an Uncertain World, by Peter Schwartz. The other is deliciously detailed, though turgid and academic: Scenarios: the Art of Strategic Conversation, by Kees Van Der Heijden.

These are not new books, but, then, their content is not perishable.

[1] With our partner, Pierre Guillaume, we comanage two private equity funds of funds. Tealta Income,  allocated to U.S. commercial real estate funds, produces current U.S. dollar income as well as modest growth (capital appreciation). Tealta Growth, allocated to international venture capital funds and other speculative assets, aims for pure long-term growth. Although Generation 1 of the Tealta Family of Funds is now closed and fully allocated, we’re currently taking commitments for Generation 2. To learn more about this asset class and whether you may qualify to be extended a private offering, please write to us at patrimonial@transeconomics.com.

Editing by Andrés Aranda.