Catching Up With Barb Zvan, CEO of UPP

Andrew Willis of the Globe and Mail reports on how a new pension plan built its dream team:

Launching any startup is hard work. Launching a $10.5-billion startup in the midst of a global pandemic, as Barbara Zvan is doing as chief executive of the newly formed University Pension Plan, means taking a whole new approach to building a business.

On July 1, Ms. Zvan and more than 40 newly recruited colleagues and consultants began running pension plans for 35,000 employees at three schools – the University of Toronto, Queen’s University and the University of Guelph. The schools launched the UPP during the COVID-19 pandemic, so staff were recruited virtually and have never met face to face. There’s a running joke in the executive team over who is taller than whom.

Over time, the UPP aspires to join the ranks of Canada’s largest public-sector plans by signing up more schools, as Ontario’s 21 universities oversee more that $25-billion in retirement savings. How does a CEO with lofty ambitions build a team without ever looking a new hire in the eye?

Ms. Zvan, previously one of the first wave of employees hired at the Ontario Teachers’ Pension Plan in the 1990s, focused on hiring colleagues who had also created successful asset management businesses from scratch.

“Getting the culture right is incredibly important,” said Ms. Zvan, who rose from assistant portfolio manager to chief risk and strategy officer during 25 years at Teachers – a period that saw the fund’s assets grow from $19-billion to more than $200-billion.

The UPP tried to hire “Swiss Army knives,” said the CEO – employees who showed persistence and professionalism in similar startup situations. At the new plan, Ms. Zvan said: “Every day, people are being asked to do things that aren’t in their job descriptions. They need to find that exciting.”

The domestic talent pool is stocked with executives and managers who pioneered what’s known in pension plan circles as the Canadian model: people who created sophisticated investment organizations at public-sector plans such as Teachers, which only owned provincial government bonds in its early years. The UPP snapped up these veteran entrepreneurs.

The UPP’s chief financial officer and head of operations is Henry Kim, who was the third employee hired when the Canada Pension Plan Investment Board was created in 1999. Christine Chen, the UPP’s acting general counsel, is an ex-Fasken Martineau lawyer who spent 12 years advising the former pension plan for British coal miners as it evolved into a multiclient private equity firm.

The recruiting all played out in video calls. Ms. Zvan said one planned walk in a park with a potential employee was cancelled by a rainstorm, and the interviewing was successfully concluded online.

Job No. 1 for the new UPP team, Ms. Zvan said, is simply “delivering on the pension promise.” That means uniting smaller plans into a single pension plan “with talent that can innovate, along with making use of increased size and scale.”

Like many large Canadian public-sector pension plans, the Toronto-based UPP is a jointly sponsored fund, with contributions coming from faculty associations and other unionized and non-unionized employees at the three universities. In what Ms. Zvan said is a welcome sign of support, Trent University’s faculty association recently agreed to move its pension plan into the UPP on Jan. 1, 2022.

By September, the UPP plans to hire its first chief investment officer and finish defining its investment strategy, a task that includes setting the fund’s asset mix and its risk management framework. The UPP has already signalled it plans to layer environmental, social and governance (ESG) considerations into asset management.

In June, the fund hired former Addenda Capital sustainable investing expert Brian Minns as its managing director of responsible investing. Ms Zvan has deep experience at incorporating ESG considerations into investment decisions from her time at Teachers, along with volunteer work at organizations such as the Global Risk Institute and federal government’s Expert Panel on Sustainable Finance.

Earlier today, I had a chat with Barb Zvan, UPP’s inaugural President and Chief Executive Officer.

Let me begin by thanking Barb for taking the time to call and update me on UPP's activities and also thank Kathleen Monk, a public affairs strategists who handles UPP's communications, for setting up this call and  providing valuable background information.

It was literally a year ago since I last spoke to Barb when she was nominated UPP's inaugural CEO, and I was happy to hear she's in good form and things are moving nicely at UPP.

You can track the latest news from UPP here and that's where I noticed UPP which started its operations as the legal fiduciary of assets on July 1st, also shared its initial investment policies with members, including its first Statement of Principles & Procedures (SIPP) and Responsible Investing Policy:

In the letter to members below, UPP CEO Barbara Zvan provides important information and context about these policies, and affirms her resolute commitment to the pension promise, with responsible investment as a core tenet of that commitment.


Dear Members,

When University Pension Plan (“UPP”) formally launched earlier this month, we stated our clear commitment to put our members’ pension security at the core of everything we do. Our goal is, and will always be, to deliver a secure, stable retirement income to our members.

Our investment strategy is a cornerstone of this goal. We know that, for many members, how we approach our investments is critical to building a plan they can be proud of and depend on. That is why today we are sharing more context and information about UPP’s first investing policies – our initial Statement of Investment Policies & Procedures (SIPP) and Responsible Investing (RI) Policy.

We start our investment program from a solid financial position, with clear priorities for funding sustainability and asset growth. The policies we share today reflect our starting position on Day One. They will progress in the coming months and years as we continue to explore and transition our asset portfolio, evolve with the external landscape, and welcome new universities to the plan. This evolution will be driven by our steadfast commitment to the pension promise, with investing responsibly as a core tenet in our delivery of that commitment.

We value and welcome your feedback, always.

Dialogue with our members is integral to our growth and success on your behalf. We are committed to continuously improving our reporting to promote transparency and open dialogue.

Your feedback in our Spring Engagement Program helped inform the development of our initial investment policies. In fact, some of you will see your voice directly reflected within these documents. As we move forward, we welcome your ongoing feedback and encourage you to continue sharing research and other informative and educational material that you feel might be of relevance in our strategy development.

If you would like to comment on our SIPP and RI Policy, you can do so by filling out our feedback form. You can also contact us directly.

Our First Statement of Investment Policies & Procedures (SIPP)

As a regulated pension plan, our core investment policies and procedures are summarized in a public document called a Statement of Investment Policies and Procedures (or ‘SIPP’). Our inaugural SIPP came into effect on July 1, 2021. It is being filed with our regulator and is available for you to review.

As you will see, our inaugural SIPP reflects our investment and asset position at the Plan’s inception. It will change over time as our investment scope widens and capacity deepens. The SIPP is reviewed annually to continually reflect changes in our approach, evolving risks and opportunities, and, as a Jointly Sponsored Pension Plan, feedback from our members. We will also post our annual updates as they occur.

The SIPP is, by its nature, a general, high-level summary of our approach, including our approach to addressing environmental, social and governance (“ESG”) factors in our investments. The deeper detail and more explicit ESG commitments are found in our initial RI Policy, as detailed below.

Our Initial Responsible Investing (RI) Policy

As a pension fund, we need to take a long view of both risk and opportunity in our investment decisions. We know that environmental, social and governance (“ESG”) factors will continue to pose material and evolving impacts over time. These considerations are essential in managing risk, pursuing opportunity, and securing sustainable pensions for the long-term.

Our first RI policy provides a starting framework for incorporating ESG factors into our investment programs, reflecting our investment management scope at inception. The policy outlines our initial commitments and approach and signals the direction for our evolving strategy.

While UPP’s responsible investing journey may be at its very beginning, it is core to our mission and our priority, as it is to many of you. As we continue to build out our approach, we are committed to doing the hard work to ensure our goals are backed by clear plans and timelines and measurable targets. This is what our members expect of us, and it is one of the important tasks in front of us now, led by our Managing Director of Responsible Investing and sector veteran, Brian Minns. We are committed to investing in a manner that is transparent and can be assessed by you, our members.

Read the first iteration of our investment policies and our Responsible Investing beliefs.

We thank you for your support and patience as we take our first steps on this exciting new path together – one with you, our members, at the very core of all we do.

Thank you,

Barbara Zvan, President & CEO, UPP

As I stated above, I had a chance to talk to Barb about what she's been up to over the last year.

Barb told me her focus was first on building out the finance, legal, HR and administrative side to make sure they can "account for every penny" on day one and be prepared to communicate effectively with their members. 

Below, you can view UPP's executive leadership team and their respective bios:

This is an executive team with extensive experience and they were hired to make sure the foundations of the plan are rock solid, and that includes culture which is something Barb believes in strongly.

There's also an seasoned senior leadership team which you can read about here:

Obliviously, everyone is waiting to find out who will be named UPP's CIO (same thing with HOOPP).

I have a good idea of who it will be but Barb was diplomatic and professional and neither confirmed or denied the person I mentioned. 

The only thing she confirmed is whoever it will be, they will be responsible for building out an investment team across public and private markets, making sure the culture is right, and making sure they are all squarely focused on the plan's mission, to meet the liabilities of their members over the long run without taking undue risks.

The CIO will be named in September and I'm looking forward to interviewing him or her after they're appointed.

Barb confirmed she is focusing on the "build-out phase" and wants people who are enthusiastic about joining "a pension startup" and more importantly, "people who are mission oriented".

They have already transitioned the pension assets of Queen's and Guelph and are in the process of finalizing those of University of Toronto (will be fully transitioned by April 2022 but UPP has the fiduciary responsibility for these assets as of July 1st).

In total, UPP is responsible for $10.78 billion in pension assets and it is looking to grow its assets in Ontario.

I told Barb that I believe every major Canadian university should join UPP but she was careful to tell me "provincial laws govern university pensions" and it's ultimately "up to joint sponsors on who will join UPP."

She just wants to make sure they're ready on day one and wants to make the process of joining UPP as seamless as possible.

We briefly talked about UPP's Statement of Investment Principles and Procedures as well as its Responsible Investment Policy.

Barb said "these are two important documents" but they will be subject change as they build out their investment capabilities.

In terms of activities, she said over the next 9 months, they will build out their investment teams, review the existing managers and build out the strategy going forward. They will also focus on fundamental asset mix, direction, and capabilities.

In terms of platforms, they only changed what was needed and are testing everything to make sure its up to par.

So far, they have been working virtually but Henry Kim, the CFO, is tasked with finding office space and signing a lease as the plan will grow significantly over the next decade. 

What else? Barb told me they were approached to be part of Canada's Sustainable Finance Action Council, and she is looking forward to working with other like-minded organizations which take responsible investing seriously. 

No surprise there, Barb was part of the Expert Panel on Sustainable Finance and she wrote many of the recommendations, so it's only natural that she and Kim Thomassin take part in the Sustainable Finance Action Council. 

And it's impressive that UPP has already laid out its Responsible Investment Policy. That shows you how serious they take ESG investing under her leadership.

Lastly, Barb praised UPP's independent, experienced and qualified Board of Directors who have been "very supportive" over the last year. That Board is led by Gale Rubenstein and includes Ron Mock, OTPP's former CEO as well as other experienced board members.

But perhaps the most challenging and exciting part of Barb's mandate will be in "how to engage UPP's members" which includes very sophisticated academics that have strong views on many fronts.

Barb is keen on communications and engaging her members and I can't think of a better person to engage them (she's exceptionally bright and very mission oriented). Her executive team will also be instrumental in communicating with members, especially Joanna Lohrenz, the Chief Pension Services Officer.

Finally, I couldn't resist to ask her about markets, ultra low rates and what she thinks the endgame is for as central banks intervene in markets like never before.

Barb told me record low rates "keep her up at night" but she's not sure how this will play itself out over the medium to long run. 

Still, she's effectively the acting Chief Risk Officer for now so she's very much in tune with markets and is looking forward to discussing all these risks with her CIO once this person is appointed.

Once again, I thank Barb for another enlightening conversation, UPP's members are very lucky to have such an exceptional leader at the helm or this organization. 

Below, ICPM's Global Pension Powerhouses series with Barb Zvan, the Inaugural President and Chief Executive Officer of the University Pension Plan Ontario (UPP) and former Chief Risk and Strategy Officer for the Ontario Teachers' Pension Plan. Great interview which took place in March.