Tuesday, June 26, 2018

OTPP and IMCO Beef Up Senior Ranks?

Rick Baert of Pensions & Investments reports, Ontario Teachers picks new CIO:
Ziad Hindo was named chief investment officer of the C$189.5 billion ($142.7 billion) Ontario Teachers' Pension Plan, Toronto, the plan announced Tuesday in a news release.

Mr. Hindo was senior managing director, capital markets at OTPP.

He replaces Bjarne Graven Larsen, who left the pension plan in April. Ron Mock, president and CEO, had served as interim CIO.

Also, Jo Taylor was named executive managing director, global development at the pension plan, according to the release. That position is new; the news release did not detail Mr. Taylor's new responsibilities. Mr. Taylor was senior managing director, international at OTPP.

Messrs. Hindo and Taylor will report to Mr. Mock.

An OTPP spokesman would not provide further details, including who will replace Messrs. Hindo and Taylor.
OTPP put out a press release which you can read below:
Ontario Teachers' Pension Plan (Ontario Teachers') is pleased to announce the appointment of two new members to its executive team. Ziad Hindo, a veteran investment professional who joined Ontario Teachers' in 2000, has been appointed Chief Investment Officer, effective immediately. In this role Mr. Hindo will be responsible for overseeing the Investments Division and overall investment portfolio. Mr. Hindo, who most recently led the Capital Markets department, will report to Ron Mock, President and CEO.

Jo Taylor, who has more than 30 years of experience in the private equity and venture capital industries, is being promoted to the newly-created role of Executive Managing Director, Global Development, effective immediately. Mr. Taylor, who most recently ran Ontario Teachers' international investment operations out of London and Hong Kong, will be responsible for elevating the organization's global mindset. He and Mr. Hindo will design and execute the pension plan's international investment strategy and presence. Mr. Taylor, who joined Ontario Teachers' in 2012, will report to Mr. Mock and will relocate to Toronto from London.

"These appointments clearly demonstrate the strength of our pool of talent," said Ron Mock, President and CEO. "Supported by their world-class teams, I am confident that Ziad and Jo will be very successful in advancing our investment strategy using a total fund approach and global mindset."
Here are my quick takeaways on OTPP's key appointments:
  • Following the departure of Bjarne Graven Larsen, a rigorous selection process took place to replace him and among the finalists there were a few excellent internal candidates vying for this top job.
  • The process was rigorous and included psychological exams, board interviews and more. It lasted a few months. All candidates had outstanding qualifications so it wasn't an easy decision.
  • Noticeably absent from the list of internal candidates was Barb Zvan, Senior Vice-President, Strategy & Risk and Chief Investment Risk Officer. It is my understanding that Barb did not express an interest in the CIO position most likely because she is aiming to become OTPP's next president and CEO.
  • In the end, Ziad Hindo was chosen to be the next CIO and this was an excellent choice. He is relatively young but his long capital markets experience will prove invaluable to Ontario Teachers' investment team. Moreover, he is very well liked internally and this move will help bolster the morale internally following the departure of Bjarne Graven Larsen whose management style clashed with that of many managing directors.
  • As far as Mr. Taylor's new position, that has Ron Mock written all over it. Ron continuously strategizes about the next 18-24 months ahead and he knows he needs someone solid and with experience to lead Teachers' Global Development. Jo Taylor was chosen for a very critical position because he will be responsible for growing Teachers' international investments across private markets and developing key relationships with partners all over the world.
Now, some may argue why didn't Ron Mock carry the title CEO & CIO given he has tremendous experience in markets and could have easily carried both positions.

My answer to that is Ron is fully dedicated to the CEO position and knows full well that Teachers' requires a full-time CIO who oversees all investments across public and private markets.

Ziad Hindo has big shoes to fill. Whether or not he was liked internally, Mr. Larsen is "brilliant" (Ron's words and I believe him) and he had tremendous experience at ATP. Moreover, his predecessors, Neil Petroff and Bob Bertram, were outstanding CIOs who really performed their duties exceptionally well at Teachers'.

Anyway, I'm sure Ziad will be a great CIO with a long future at Teachers'. Jo Taylor will also do well in this new role working out of London. They will both report to Ron who will be supervising them during this transition and beyond.

In other big moves, aiCIO reports, Jean Michel Named CIO of Investment Management Corp. of Ontario:
Jean Michael has joined the Investment Management Corp. of Ontario, which manages public pension plans, as its chief investment officer.

Michel, a 20-year pension veteran, steps into the role after two years with the $224.3 billion Caisse de dépôt et placement du Québec (CDPQ), which runs Quebec’s public pensions: a seven-year run as president of Air Canada Pension Investments; and more than a decade at Mercer consulting group. At Air Canada, he took its 14 insolvent pension plans and restructured them into a surplus position.

Known for his portfolio construction, Michel said he was looking forward to the challenge and building a “world-class organization” in the Ontario investment firm when he starts in July.

Although the Ontario management company manages C$60 billion ($45.1 billion) in assets, it is relatively new on the scene, founded in 2016. Like most Canadian pension plans, it operates independently of the government. Its first clients were the Ontario Pension Board and the Workplace Safety and Insurance Board. The fund grew to its current size in just a year. It is Canada’s ninth-largest financial institution.

Most of the fund’s money is in publicly traded equities (41%), fixed income and money markets (22%), and real estate (14%), according to its website. The rest is in diversified markets, private debt, private equity, absolute return, and infrastructure.
Jacqueline Nelson of the Globe and Mail had a more extensive article where I note the following:
Bert Clark, CEO of IMCO, said he was drawn to Mr. Michel’s experience in portfolio construction, which involves an analysis of a client’s liabilities and needs and how each investment made for them will contribute to their overall investment goals.

“Almost every investor will agree that that’s the most important thing you do is decide what you’re going to invest in. And yet if you look at the asset management industry, the time that’s spent on portfolio allocation pales in comparison of the amount of time that’s spent on outperformance in individual asset classes,” Mr. Clark said.

Mr. Michel will also build up more internal investment expertise at IMCO so that clients’ money can be directly put to work in asset classes such as private equity, infrastructure or real estate. This is already a significant departure for the two current clients, which outsourced the majority of their investments.

Because IMCO was not beholden to any legacy investment process, IT or other client-management systems, the fund has been building many of these functions from scratch, including hiring chief risk officer Saskia Goedhart from an Australian financial company earlier this year.
I've already covered IMCO, aka Ontario's new kid on the block.

Bert Clark is a smart guy and he hired another very smart person to help him manage this growing and important pension fund.

As I've stated before, Jean Michel did wonders at Air Canada's Pension Plan bringing it back to fully-funded status from a severe deficit (it was a disaster prior to his arrival). He basically followed HOOPP's principles and strategies to match assets with liabilities very closely and create as much alpha internally as possible to lower overall costs.

At IMCO, he will take that experience as well as the experience he had at the Caisse as Executive VP,  Depositors and Total Portfolio, to hit the ground running.

Given their relatively young age, Bert Clark and Jean Michel will be the dynamic duo to watch over the next decade as they ramp up investment operations at IMCO.

I sincerely wish Ziad Hindo, Jo Taylor and Jean Michel lots of success as they assume these new senior investment roles.

It's not going to be easy, the bull market is in its final stretch, the next ten years will look nothing like the last ten years, everything is fully valued if not overvalued, which is why these organizations are very lucky to have experienced and qualified staff in these senior investment roles.

Below, an older interview with Jo Taylor, OTPP's new head of Global Development, at the 2013 SuperReturn International conference discussing investing in Europe.

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