Wednesday, January 28, 2015

PSP Taps New CEO From Rival CPPIB

Euan Rocha of Reuters reports, Canada's PSP taps new CEO from rival pension fund manager CPPIB:
Public Sector Pension Investment Board (PSP), one of Canada's largest pension fund managers, announced on Tuesday it has chosen André Bourbonnais as its president and chief executive officer.

Bourbonnais joins PSP, which manages the pension funds of federal public-service workers, from rival pension fund manager the Canada Pension Plan Investment Board (CPPIB), where he was head of private investments. He replaces John Valentini, who was filling in as CEO after Gordon Fyfe left PSP last year to head the British Columbia Investment Management Corp (BCIMC).

PSP said Bourbonnais brings an extensive global network and proven portfolio management skills to his new job.

Separately, CPPIB announced that Mark Jenkins, who has been overseeing its direct private equity investments and its natural resources investment programs, will take on the role being vacated by Bourbonnais.

Jenkins, formerly a banker at Goldman Sachs and later Barclays, joined CPPIB in 2008.

CPPIB also named Pierre Lavallée to the new role of global head of investment partnerships. He will focus on broadening relationships with the fund's external managers in private and public funds, expanding direct private equity investments in Asia and building the fund's thematic investing capabilities.
Scott Deveau of Bloomberg also reports, Public Sector Pension Appoints Bourbonnais as CEO:
Public Sector Pension Investment Board has appointed Andre Bourbonnais president and chief executive officer, effective March 30.

Bourbonnais has more than 20 years of industry experience, most recently as senior managing director and global head of private investments at Canada Pension Plan Investment Board, PSP said in a statement.

He replaces interim CEO John Valentini at Ottawa-based PSP, which manages the retirement savings of Canada’s federal civil servants and security forces and had assets under management of C$99.5 billion ($80.4 billion) as of Sept. 30.

“We are confident he is the right person to lead PSP Investments into its next phase of evolution, which involves increasingly global activities and sustained growth,” ’ said Michael Mueller, PSP chairman.

Canada Pension said it had promoted Mark Jenkins to global head of private investment to replace Bourbonnais. 
PSP Investments put out a press release on this new appointment which you can read by clicking here. Before joining PSP Investments, Mr. Bourbonnais was Senior Managing Director & Global Head of Private Investments at Canada Pension Plan Investment Board for nine years. Prior to that, he oversaw the 2005 IPO of Addenda Capital Inc., a leading fixed income manager, and managed private equity portfolios for the Caisse de dépôt et placement du Québec from 2001 to 2004. A lawyer by training, Mr. Bourbonnais began his career in 1986 with Stikeman Elliott LLP and, after three years in Europe for a merger and acquisition consulting firm, he joined Teleglobe where he was Chief Legal Officer from 1995 to 2000.

Sovereign Wealth Fund Institute published a great piece on André Bourbonnais discussing all his achievements. So what do I think of this new appointment? I'm a little bit surprised he left CPPIB where I thought he was next in line to take over after Mark Wiseman. But he's a Montreal native and Mark Wiseman is a young CEO so he would have had to wait a very long time before taking over the helm.

More importantly, this new appointment makes perfect sense for PSP. They tapped someone with extensive private market experience, contacts, industry experience and someone who can manage PSP during the next phase of its operations. It also helps that he's French Canadian and perfectly bilingual as PSP's head office is in Montreal and many employees are French natives (but perfectly bilingual too).

I have never met André Bourbonnais so I can't tell you how he is in person but we did have an email exchange where truth be told, I was irritated because he told me to remove him from my distribution list. This request struck me as unnecessary and I let him know it (Itend to take those things too personally but I shouldn't).

Mr. Bourbonnais is now running a major Canadian pension fund and has his work cut out for him. His experience at the Caisse and CPPIB will serve him well and now that he is a CEO, his role will change in a significant way.

My experience at PSP allowed me to gain insights on the job of being a CEO. I saw the good, bad and ugly from a CEO's vantage point. The toughest job of being a CEO is not only managing people, which is often cumbersome, but also managing the board of directors, which can drive you insane depending on how the board members are.

I don't know much about Bourbonnais's managerial skills but he will have his work cut out for him at PSP where he will lead a diverse group of people. Still, he'll be surrounded by very competent professionals and I'm sure he will bring in a few of his own people to help him in this new role.

For PSP's employees, at least now they finally have a CEO after Gordon Fyfe left to head bcIMC, and he's someone with a strong reputation in the pension fund industry and someone with extensive private market experience which is the direction that most of Canada's large public pension funds are heading.

On that note, let me wish André Bourbonnais congratulations and best of luck in this new and important role leading PSP Investments. I will also publicly state that I've recently applied to senior investment positions at PSP and expect to be treated fairly and without prejudice regardless of my health status, past employment at PSP and sometimes abrasive blog comments which turn some people off (but others like them and tell me to keep forging ahead!).

One last heads up for Mr. Bourbonnais. I was reading yesterday that even before undertaking his portfolio, Greece's new alternate minister for shipping, Theodoros Dritsas, announced the cancellation of the privatization of Piraeus Port Authority (OLP).

The political earthquake that just hit Greece is something to be concerned about, especially for PSP which now owns part of Athens' airport. Greece's already-fragile banking sector has taken a hammering as fears of a debt default have hit lenders' stocks -- and deposits (see below).

I shudder to think what will happen if a Syriza-led coalition decides to renege on deals made by the previous government with foreign investors, however, I do think cooler heads will prevail. Moreover, Greece's new finance minister, Yanis Varoufakis, might be a left-wing academic but he's no extremist, and understands the need to respect private market transactions.

Still, the media in Greece has raised the possibility of nationalizing banks and private-public partnerships and I hope this doesn't happen because it will impact PSP's investment in Athens' airport. I liked that deal and still think it will be a huge success, especially once we get past the latest fears of a eurozone crisis.

Below, a discussion with André Bourbonnais at a Thompson Reuters conference where he discussed CPPIB's approach to investing in private markets (October, 2014). Very interesting discussion, listen to his comments and answers to some excellent questions.

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