← Top Traders Unplugged
Top Traders Unplugged
ALO34: Building an Asset Owner Mindset in Modern Pension Investing ft. Dan Mikulskis
01:08:13
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- [00:00]
A
Foreign. Thing to do. So I do think it's worth deeply getting into it. And a quarterly basis is kind of about right, but it's quite helpful to frame it with a little bit of humility to kind of say, well look, we better understand what the consensus is and better acknowledge that's probably priced in and has quite a good chance of actually being right. So you know, where, where do we actually have conviction in something that's differentiated from consensus is the question that everyone's got to answer really, isn't it?
- [00:38]
B
Imagine spending an hour with the world's greatest traders. Imagine learning from their experiences, their successes and their failures. Imagine no more. Welcome to Top Traders Unplugged, the place where you can learn from the best hedge fund managers in the world so you can take your manager due diligence or investment career to the next level. Before we begin today's conversation, remember to keep two things in mind. All the discussion we have about investment performance is about the past and past performance does not guarantee or even infer anything about future performance. Also understand that there's a significant risk of financial loss with all investment strategies and you need to request and understand the specific risks from the investment manager about their product before you make investment decisions. Here's your host, veteran hedge fund manager Nils Kostrup Larson.
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C
Welcome or welcome back to another conversation in our series of episodes that focuses on markets and investing from a global macro perspective. This is a series that I not only find incredibly interesting as well as intellectually challenging, but also very important given where we are in the global economy and the geopolitical cycle. We want to dig deep into the minds of some of the most prominent experts to help us better understand what this new global macro driven world may look like. We want to explore their perspectives on a host of game changing issues and hopefully dig out nuances in their work through meaningful conversations. Please enjoy today's episode hosted by Alan Dunn.
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D
Thanks for that introduction Niels. Today I'm joined by Dan Mikulskis. Dan is Chief Investment Officer at People's partnership in the UK. It's one of the largest UK pension providers managing 40 billion pounds in assets under management. Dan has been in the markets a number of years. Previously an extensive career as a consultant with Lane, Clark and Peacock, Reddington and Mercer and also experience in the sell side in trading. Dan, great to have you with us. How are you doing?
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A
Oh great Alan, thank you so much for having me. I'm really looking forward to the conversation. Thank you.
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D
Not at all. No, great to have you. And I Didn't mention. And I am a reader of your LinkedIn blog. How often is that?
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A
Oh, it slipped a little bit more recently. I used to do it every couple of weeks, now it's more like once a month. I know we all know I try and make it worth reading, so when I've got enough good stuff to go into it, I try and publish one.
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D
Absolutely. We all start off very ambitiously thinking in terms of weekly or bi weekly, and it does slip, but no, it's always an enjoyable read that covers a lot of topics, so I enjoy that. I mentioned your career trajectory a little bit in terms of background in consulting and we always like to start off by getting a sense on how people got interested in investing in markets in the first place. So what got you interested in investing to start?
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A
Well, yeah, well, I suppose my career sort of started off the sort of an actuarial route, really. I mean, yeah, most of my career, as you say, has been in. Been in consulting. I did have that little diversion when I moved to Australia and worked more in investment banking and talk more about that, if you like, but I mean, most of my career has been been in consulting and I, I studied actuarial qualification as a, as a graduate and I was doing my master's degree at university and did an actuarial science module there and for my sins, was quite, quite drawn to it in terms, I think, of the sort of practical applications of some of the, of some of the mathematics. And I was also quite drawn to the idea of doing a professional qualification. I mean, if I'd known how many sort of weekends in my early twenties I'd end up spending studying ra, going out, then I might have reconsidered that. But anyway, I considered it a bonus that you could study for a professional qualification. Sounds a bit mad, said that now. But anyway, that was where sort of things started off and, you know, I was sort of directed to the investment consulting side of those firms. And then actually, it's very interesting, the time period we're talking here was sort of early 2000s. It was almost in the early years really of investment consulting as a thing. I mean, that was sort of brought into being by the Pensions Act 1995. So it was probably late 90s, early 2000s, that these firms were considering having an investment consulting sort of practice as separate from the sort of actuarial piece. So they were reasonably well established at the time, they weren't brand new. But looking back now, it was still the kind of early years of that as a branch of the Sort of actuarial genre, if you like.
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D
Interesting. And then over time obviously you've transitioned more from consulting into being a cio. And at People's Partnership, it's obviously a business that has grown quite rapidly. You know, I mentioned £40 billion in assets under management. I think when we chatted previously it was only 20 billion a year or two ago. But definitely would be helpful, I think for our listeners just to give us a sense of what People's Partnership does and kind of the history behind, you know, its origin and evolution.
- [05:46]
A
Yeah, absolutely. Love to. I mean I've been at People's Partnership for about two and a half years now and it's been fascinating learning some of the history of the organization, which obviously I've not. I've not been been part of for, for most of its history. But it is a really interesting organization and you know, I think it's a sort of a model that, that has a lot more wider applicability. But People's Partnership used to be known as B&CE, which stood for buildings and civil Engineering. And it was a sort of in industries, multi employer, kind of federated employer, trade union kind of roots in terms of a group of employers in the construction sector coming together and creating an entity that could offer financial products to the workers in that industry on a profit for member basis and effectively offer financial products to underserved communities, you might say at that time. And the genesis of the organization was in the 1940s, quite a while ago. And the sort of the first products were holiday pay stamps which weren't common at the time. But then over the decades obviously the construction industry in the UK grew massively and various sort of other products were offered, I think things like insurance and those sort of things. And culminating in a sort of a multi employer stakeholder pension scheme which was then sort of gave rise to the People's Pension which was sort of set up in response to auto enrolment in 2012, which is where regulations changed in the UK so that employers had to enroll all their staff into a scheme. And because of the profit for member ethos rather than a profit for shareholder type thing, the organization was able to offer that pension to organizations of all different sizes, from big employers down to the much smaller kind of SMEs, two three person organizations. And that really was key I think to our success in that we were able to bring on board releases 100,000 employers that use us as their vehicle for auto enrollment. And that's led to a huge amount of members, a huge amount of people around the country paying into people's pension every month, really. Which has sort of compound. These things compound over time, don't they? What that's meant over the last few years is quite an astronomical growth in terms of the AUM. As I say, I joined the business two and a half years ago. We'd just gone through 20 billion AUM and recently we just crossed 40. So that's just the last couple of years really in terms of the growth and that sort of trajectory is what's going out into the future as well.
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D
Great. So about 100,000 employers and how many ultimate members would you say?
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A
Seven million. Seven million?
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D
Yeah.
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A
So it's a huge proportion and about 2 million of those are actively contributing every month. We have a lot of deferred members as well. That's partly because a lot of the employers that we service are in the sort of sectors of the economy like retail, hospitality, construction, where people might do contract work. So three to six months contract, they pick up a pension with us and then they'll leave and go to another job. So by the nature of the kind of segments of the economy, you end up with a lot of deferred members who have relatively small pots and then you've got that core of the active members sort of 2 million kind of contributing every month.
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D
Great. And I mean, are there parallels to this model elsewhere or was it. I mean, obviously it has origins going back to the 1940s. That's not a new idea. But we've. The auto enrollment has come in in the last decade or so. I mean, is it modeled on the Canadian model or models elsewhere or would you say it's more unique to the uk?
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A
Well, that's a very good question. I mean it's very similar to how the Australian super funds are set up. Okay, so that there is C Bus, which is the construction industry super fund in Australia. Is. You could view that as a pretty close cousin of, of us. Really? And yeah, in Australia you've got a much bigger grouping of these industry super funds that, that came up around particular industries. Obviously you've got plus in the hospitality space, rest are in the retail space and, and, and so forth. And, and they're, they're operating the same kind of profit for member model. And so I think it's a little bit more common in Australia. You also see it a little bit in the Netherlands. So some of the funds there are sort of on an industry basis. I forget the exact names now, but there's one of the larger ones there is the sort of Healthcare Industry Fund, which again is set up on that kind of basis. So yeah, it is models that you see elsewhere actually. And if anything, it's maybe been a little bit underappreciated in the uk. I suppose you can view that auto enrollment was sort of grafted on top of the existing pensions landscape in the uk, which was mainly a commercial sort of retail sort of landscape, without necessarily a lot of thought being put into the nature of the institutions that we're going to, going to grow our past with that.
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D
Very good. So, I mean, in practical terms, and you are a large basically DC pension serving 7 million clients effectively, I mean, I guess that puts you in the category of asset owner. Is that fair to say? I know that's a term that we increasingly hear these days is the kind of the power of the asset owners and how they think about managing funds. I mean, does that shape your thinking in terms of how you organize the business and set your investment strategy?
- [11:13]
A
Yeah, absolutely. And that was my big kind of thing, I suppose, when I joined the business two and a half years ago, was that we should consider ourselves to be an asset owner and should set ourselves up very deliberately with our asset ownership model at the forefront of our thinking. Now, that might sound like the most obvious sort of statement ever, but it is kind of not. Because where UK DC Trust came from, they came from a, you know, they were sort of startup in some ways. They're starting from ground zero in terms of assets. And obviously when you do that, you have to set yourself up with the most efficient, cost effective, cheapest, simplest model you can, for very understandable reasons. So UK DC grew from necessity out of very basic approaches to asset ownership, which was basically, you know, passive pooled funds, single provider. And to be honest, that worked really well. I mean, passive done pretty, pretty damn well for the last 10, 15 years. So, you know, good investment outcomes, good value for money, you know, cheap to oversight, what's not to like sort of thing. And so certainly that, that got us, that, that's got us pretty far. But my, you know, my view at was at 20 billion, we, we'd, we should have, it was time to sort of move on and grow up that model and, and certainly, certainly at 40 billion. I think you, you, you can and should have a bit of a different approach to, to asset ownership and there are certain a variety of approaches to asset ownership model actually. And I guess part of my point was your decisions around your asset ownership model are kind of upstream from all your other investment decisions. You can talk about do you want to be in US equities, global equities, emerging markets, private debt, infrastructure, what have you. Upstream from all of that is your ownership model and how you want to set yourself up. So I suppose my thing is that you ought to spend some time thinking about that and kind of getting that right first before you start trying to kind of, you know, grab all the nice shiny things and talk about your latest ideas and, you know, whether you want to be long, this, that or the other.
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D
Yeah. And I mean, so what are some of the kind of considerations that you have to think about when you're in that setup phase or, you know, what are the different routes you could go down that you've considered?
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A
I think the first one was team. That was the first sort of key, key plan curve. I mean, we sort of. We sort of took it down to about four or five different, different pillars there. But the team was one, Partnerships was another segregated mandate, sort of direct ownership was another, systems was another one, and governance being another one. So those are the kind of main areas that you got to consider and you got to decide where you. Where you sort of land on it. But yeah, a team has to come before everything. And, and I sort of, my viewers, we, we wanted a. A pretty specialized kind of senior seasoned investing team that could have specialists across all areas. But we wanted that team to stay pretty kind of lean and focused. So we're at about 30 individuals at the moment, 30 people full time on the investment team, which is a lovely number because we can get all of us in a large conference room, which we do that twice a week and just get all on the same page. It's really, really nice. So we'll probably grow a little bit from that. But that kind of 30 to 50 number I just think is a real sweet spot for a team. And obviously the asset management is an outsourced model. And we're deliberately, as part of our philosophy is relying really heavily on those managers to get a lot of resource out of them and do a lot of the work that in a different world we might have a large team of analysts set up to do. But we're trying to run it sort of very efficiently, if you like, with that relatively focused team of kind of senior investors. So that was the starting point, getting the team right.
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D
And I mean, obviously, as you say, a key element to it. I mean, what's the kind of attraction or the pros and cons of working in a kind of a large asset owner in this space in terms of. Is that an attractive place to go. Are you finding for investors or does it attract a certain type of person or what would you say about that?
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A
Yeah, absolutely. It is an attractive place to work. He says extremely self servingly obviously us but you know I, I've seen our look, our, our profile has changed massively over the last two, two and a half years and we've. Yeah, I think we've really put ourselves on the map. We had a fantastic advertising campaign back end of last year that I, I can't take any credit for, I wasn't involved in that but is that's really put ourselves on the map as well as just the growth and some of the headlines. So a lot of things have come together to, to, to make it just I think a. We have a far more well known proposition now and therefore far more attractive. When I, when I joined the business there was a bit of a sense of gosh, wow, these people seem really big but I've never really heard of them. Is it actually real? What are they actually doing kind of thing. And we're well, we're well past that now. Certainly we talk to asset managers, everyone knows who we are and gets it and gets the growth and when you're talking to people who might want to come onto the team it's the same now. They've really kind of seen that. So that's changed a lot over the last two years.
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D
Yeah and obviously what comes with size and scale is more cloud and I guess more flexibility as you say, more recognition in the market. I mean obviously, obviously you can see the ability to negotiate on things like fees I guess. I mean outside of that, what else does that kind of size and scale bring?
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A
I think yeah, the ability to negotiate with managers is a big unlock for quite a lot of things. It's not just giving me cheaper fees, although that is obviously a part of it. It's a lot of other things as well. It's about how bespoke you can get the structuring on the fees. It's not just give me the fund for slightly cheaper is can we talk about some kind of SMA where the whole structuring of the fees is completely, you know, completely bespoke to what we want. And that takes a lot of time and effort and focus from a manager to deliver that. So you need that, you need the bigger size to sort of get them, kind of get them interested there. But yeah, you also get a lot of access to other sort of areas that the managers can deliver. So doing research projects, getting insights in strategy and macro, even Cloud collaborated with managers on policy work. You know, we have a huge number of touch points with the managers that we work with and people throughout their business give us a lot of their time and effort. And I think that's, you know, that's partly because we have big mandates with them that are growing fast and they see the value in kind of investing in that relationship as well. So I think yes, you can a lot of value out of it. So another point to make is on systems. So with the managers we've worked with, we have kind of developed and delivered systems and portals. So we have various views into the portfolios that they run for us, which is just really helpful from our perspective. It makes it so much more efficient and easier to stay on top of those portfolios. Given larger proportion of our assets is with the manager. And then we have a system that can give us a direct view into it. It's a really nice setup. Much easier than if we, you know, 10 dozen managers and trafficking Excel spreadsheets back and forth sort of thing to get a sense of it.
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D
Yeah, and obviously I guess as well, what comes with size is the possibility of running strategies in house. So I guess if you have sufficient assets that can become commercially feasible or plausible to run in house as opposed to going out to market. How do you think about that? Or is that something that will. Could become even more of a consideration if assets grow again more or not? Are you very much in the outsource model?
- [19:00]
A
It's, I mean it's, it's a road that some, some large global asset owners have gone down. You know, I spent, spend a bit of time in Australia talking to the Aussie super funds and a lot of them have started to go down that, that model where they look to insource a proportion of the, of the asset management. I think there's typically sort of three reasons why people do that. One is cost. But there's, that's not the only one. I think it's cost, probably control and then alignment and I think it's sort of. Yeah, I think some combination of those really are coming into play. I think people don't want to give the impression it's just a cost thing because that can sound a little bit, I don't know, a little bit kind of excessively, kind of capitalistic about it, I suppose. But the cost thing, that depends a lot on what your current baseline is in terms of the fees you're paying. And that baseline varies a lot. So yeah, if you're paying decent fees, active management, then I Can see why there'd be a big saving. But equally, if you've got your fees baselined in an already pretty low level, the cost one might not actually be as big as you think in listed markets certainly. So that's an interesting one to explore that varies a lot whether that's a good trade off or not. And the other ones are equally as interesting. So alignment is a key one because you know this principal agent issues are. Yeah, they're really real in investing. And you know, I've often talked before about you get this sort of traditional view of investing where an investor owns stocks and companies and it's as simple as that. And then the investor makes all the decisions, you know, about asset classes, sectors, buy, sell, all that. Whereas in practice, what in practice there is is there's a quite an elongated chain of providers and so forth in the mix. You know, in some cases you have something like, you know, a trustee, a consultant, a provider, a platform, a manager, an index provider, all sitting between an investor and, and what they're investing in. You could easily have seven or eight layers between. And when, when you got a chain like that, the principal agent problems at each link in the chain can really mount up and, and can really end up meaning that, that some things aren't actually being done in the, in the, in the interests of, of the end of the end saver at the end of the day. So, so get, getting alignment in that chain is really important chain. So, so I thought about that. I think asset owners can collapse the chain down a little bit by having direct control in segregated mandates and bringing some of those decision making in house. That there is the thinking that in housing asset management is kind of the ultimate alignment because you're kind of, you know, you're, you're doing it internally and I would say yes, probably. But I think it is also possible to really work hard on the alignment with external managers as well. And that has that up to now that has been our focus, to be honest with you, is trying to say can we really rethink the way we're allocating these assets, how we're choosing our managers? Really, really get the max alignment we can with an external manager. And I think you could go quite far there actually. You really can if you do that right. You know, it's a very different situation than allocating to a pooled fund and a manager versus sort of crafting an SMA with a manager that's just deeply, deeply aligned with you in so many different kind of ways. So yeah, I think the Insource versus outsource is an interesting discussion. Yeah, we're more focused on an outsourced model over the current planning horizon. And I think when you chisel away at them, some of the benefits of insourcing, not always as big as might be perceived because you can bear down a lot on the costs and you can actually do more on alignment than you think. So you shouldn't sort of knee jerk to thinking that it's all about bringing it internal.
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D
Yeah, interesting. I mean, you touched a lot on the kind of external managers, it being very much a partnership, obviously, when you have such large amount of assets, you know, all asset managers are presumably queuing up outside to do business. So there's a lot of choice. How do you think about, you know, going from that global universe of managers down to a more manageable, you know, shortlist to consider?
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A
Yeah, it's a fantastic question. We've been through that process now about four times. And so, yeah, the ones, obviously the big ones there that got announced last year with the appointment where we appointed Amundi to manage, develop market equities, Invesco on fixed income and Rubico on emerging market equities. All of those were quite lengthy processes and, you know, part of that process probably familiar to anyone who's done. Done a manager selection piece. There's some common elements to it. You want to have some kind starting point in terms of a universe tool. You know, we use the likes of investment on liquid side global fund search. You. So you need somewhere starting from the universe, you need some basic kind of screening to get you down to a sort of fairly large but manageable number. So 20 odd, something like that. And then we would typically do a kind of model portfolio sort of exercise with, with the 20 odd, and then look to cut that down to a sort of shorter list, ultimately getting down to a short list of about, I don't know, six to ten managers where you. Then you're going really deep with the multiple meetings over the course of a long period of time. And yeah, we come up with a balanced scorecard and score them and all sorts of things there. But end to end, that process for us has taken us about nine months. And yeah, you learn a lot about the managers over that period of time. It's really interesting. That's where the kind of partnership bit really comes through because that's not so much about ticking boxes, but you do just learn a lot by how they show up in every single interaction. You know, are the people briefed? Do the people understand what you Want the whole time. Is there consistency in terms of who you're speaking to, what you know, what's being talked about? And that doesn't come through on a one off meeting obviously, but over a nine month period of time it sort of comes through. And obviously the managers I just sort of mentioned that generate the larger end of the spectrum, obviously Amundi and Invesco probably both in the largest 20 managers in the world kind of thing. So that, you know, we're talking big organizations here. All the managers we were talking to there were big, were big organizations. And that comes with its pros and cons, doesn't it? Big organization means you've got loads of cool stuff, but big organization means it's big and it just can be tricky to navigate. So seeing how our key relationship point person navigated that for us over the period of time we were assessing them was also quite important. And then the role of that relationship point person became really key over that period of time. And sort of understanding how they operated, seeing how effective they were at getting the resources of the organization and bringing it to bear was quite interesting and quite a big differentiator actually because yeah, I just think some managers done that well, some have sort of underappreciated maybe that, that, that, that side of it. And then I get why, I guess as I've been a consultant for a while, I think there was a time there when it was very much a product led sort of marketplace where consultants were very focused on give us your best product, give us your best product in this category. I don't know, your best global active bond fund, your best, you know, multifactor equity fund. And this wasn't particularly a focus on the relationship and extracting the value from that. But I think things are shifting there with more bigger asset owners and the partnerships. Being able to deliver those relationships I think is a real, real skill. And it's brilliant when it's done well, it really is. And there's quite a lot of dispersion across the industry in terms of how effectively that can be delivered. And yeah, as I say, you don't, you don't discover that in a one off meeting because everyone looks great in a one off. It's the nine months of interaction and the back and forth that sort of reveals that to some extent.
- [27:17]
D
Yeah, interesting. I mean, I guess most or all large asset managers would talk about their solutions, capability and internally we talk in terms of kind of consultative sales. But it sounds like there are quite notable differences in how good they are at delivering that is that it?
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A
Yeah, that's been our experience for sure. And it, yeah, it certainly depends on the individuals that you've got and how that sort of process works. It also reflective a little bit of the culture of the managers, I think, a little bit. Like again, when you go through a long process, you do sort of get a sense of the culture. You know, how flat is the culture, is it hierarchical, you know, how sort of clunky and bureaucratic is it internally to get things done? You know, these are things where I think it's very tempting as a manager to feel like, like your internal kind of inefficiencies are somehow invisible, but they absolutely do over a period of time they come through. And as a client you can sort of sense if there's, you know, it's really clunky getting going from one side of the business to the other or in trying to go from one office to another or one. One function to another, whereas other ones who are flatter or have a more open culture or whatever can make that a little bit easier. So, yeah, I think there's a whole load of considerations there that be worth focusing on and perhaps have been a bit underappreciated.
- [28:34]
D
Yeah. And I mean, there is that kind of trade off between building deeper relationships with a smaller number of managers and keeping the kind of the perspective broader and considering lots of managers all the time. I mean, how do you think about that trade off for what's kind of correct number of relationships you want to maintain? I mean, could you use one asset manager across multiple asset classes or not? Or how do you think about that?
- [28:59]
A
That. Yeah, we've been constantly debating that honestly, where the right, the right thing is there. I, yeah, I sort of had this quite strong view that the right number of manager relationships is less than most asset owners have, basically. And yeah, it was pretty common like in the uk, even for a modestly sized asset owner could easily have two dozen managers on the roster. That happens very frequently. I do think that's too many. But we started to have those conversations around that there is a limit to that. There are some areas we're looking at where I've become convinced that you do lose something if you're trying to get a manager to stretch over too many different areas. And also, what about boutique managers? Smaller managers have something to offer and you sort of struggle to fit them into the sort of thing I've described. So, yeah, we're starting to develop approaches to saying, well, okay, this is our core number of really core partnerships and that Number, I think, might be quite small. I can see that maybe never being above maybe half a dozen kind of really, really core partnerships, because we have to invest in those as well. We absolutely need to spend a lot of time, you know, people on my team, we'll be talking on a daily basis to some of these managers. We have these structures set up for all the, you know, all the meetings that we're holding with them over an entire year. We kind of set that all up. So we absolutely need to invest outside and you can't do that with a big number. But then there's a second question of can we find ways of slotting in smaller, more specialist allocations into that without breaking the model, which is something we're looking at at the moment, some really sort of exciting kind of operational, potentially ideas, some ways of delivering slightly more specialist managers in a way that is still kind of preserve some of those efficiencies and doesn't kind of break that model because, yeah, you're right, even big managers can't do everything. There's some really good stuff that you can go to if you can access the specialists.
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D
Yeah. And I mean, you're talking about partnerships, so it's. Presumably they're providing more than just obviously running a portfolio in a segregated mandate. It's, I suppose, research assistants or bespoke projects, things like that. Is that part of the value add?
- [31:08]
A
Yeah, absolutely. And one example we used a lot early on when we were talking to them to try and. Try and bring it to life was that this question of, you know, sort of macro insights, if you like, as a general. As a general thing, and the sense that obviously I can, I can say to any manager, can I get a call with your chief macro strategist? Everyone will say yes. And then there'll be a bunch of emails backwards and forwards. Try and find a time that. That will go in the diary in like, four weeks time. We'll both dial into the meeting. I'll be a bit of like, oh, why are we here again? And then they'll, they'll, they'll slot into their usual kind of patter, which they've done a load of times, and not be very good. But, but, you know, probably on average, 50% of it will be relevant to me and 50% won't, and that's it. And then it'll be a lovely meeting. We'll say, thanks very much, close the meeting and that'll be it. That's one version of it. Whereas I was saying what the partnership is more like is if we have someone on their macro team who's kind of, you know, going into the office in the morning kind of thinking, ah, we've just changed our view on European equities, I must get on the phone to Dan and his team and let him know because I know they care about that and that's something they can, they can do do is having that ongoing thing in the diary where every single month we're keeping up to say, okay, you've changed your view there, right? Okay, what do you think about Japan? Are you still neutral in the us? Where are you thinking about this? What about the dollar? And just keeping tabs on it all the time so that we can sort of synthesize that information and make it far more relevant to us. Because it's very easy for someone to pop up and say, yeah, short the dollar kind of thing. But it's different to say, well okay, but what did you say three months ago and six months ago and when did you change and what's your conviction level and what's your time horizon? And you only learn all that stuff by having an ongoing conversation with them over a period of time, really understanding how they think about it. Even to the point where with the managers we work with, for example, we get input from their sort of central strategist teams and then also some of their multi asset risk takers. Now those are different viewpoints and they might not always agree and that's fine. But it's really interesting to know is that a strategist call or is that the multi asset risk takers call? And so you're starting to tune into the different ways those different teams work, the different way their incentives operate. So it's really interesting and that's been great. And I think all that comes down to us kind of synthesizing all that in an effective way and bringing that information together, you know, into the meetings that we have every quarter where we're looking at our, our allocations. And it's just far more useful when my team has been in almost constant contact with a small number of these kind of strategists and then my team can kind of come into the room and represent all that rather than us just having a one off call with a, with a strategist who says, you know, buy this, sell that, buy the other kind of thing. But we never spoke to them before, so we don't know if that's new views or something they been talking about for 10 years, you know.
- [34:06]
D
Yeah, interesting. I mean, obviously your long term investors, you know, you have to be cognizant of the news flow, but I guess you're not overly reactive. So to what extent are you using those macro insights, you know, day to day, week to week in kind of asset allocation or, and, or, or even within asset classes at all?
- [34:26]
A
Yeah, it's a really good question. I mean I, I spend a lot of time trying to make the point that it, it is important to step away from, from the noise and when it comes to most head, most headlines you see coming across Bloomberg, I do think a decent starting point is it's pretty much all noise actually and you've got to remind yourself of that. And I also try and remind my team that most of the time consensus is probably about right and it's probably already priced in. So I think markets do a decent job of pricing stuff in and you, you, you better know what is priced in. There's no point sitting there saying oh you know, I love US equities or whatever without recognizing that that is already am pretty well priced. So in that sense I'm quite far across the sort of efficient markets side of the world. There is, there is a but which is I, I do think you can do a little bit better than that emphasis on a little bit. And it is worth doing that because we're, we're a 40 billion fund so if we can just add a little bit through that dynamic allocations or whatever, it's, it's worth doing. But you got to have a bit of humility about it. I think you got to set yourself some clear guard rails and some kind of expectations for how much you're going to, you're going to achieved. I think we can definitely add a little bit more by, by leaning into and out of some of those regional allocations here and there. But you don't want to get car carried away that you get suddenly some kind of active macro trader swinging around all over the place. Because that would be, I just think that would be going, going too far. So yeah, we do have a quarterly process. We have a quarterly quarterly investment forum where we try and you know, all the key investors on the team kind of sit down for half a day. We try and run through all the positioning that we have in the, in the portfolio and the idea is to sort of re. Underwrite that on a quarterly basis. Now it doesn't mean we change it every quarter and quite often we don't. But I, I think it's a really helpful practice because when it, you do come up and want to make a change, it's so much easier having had that conversation three, four times, sort of flagging the indicators you're looking for, then it sort of happens, then you have so much more conviction in that change. So we're probably only making changes like once a year, so maybe less than that in these areas. But I think to inform that a quarterly conversation that kind of starts, that starts with kind of macroeconomics and then works its way all the way through to kind of regional allocations, duration maturity allocations and credit and fixed income sort of thing is quite a powerful thing to do. So I do think it's worth deeply getting into it. And a quarterly basis is kind of about right, but it's quite helpful to frame it with a little bit of humility to kind of say, well look, we better understand what the consensus is and better acknowledge that's probably priced in and has quite a good chance of actually being right. So where do we actually have conviction in something that's differentiated from consensus is the question that everyone's got to answer really, isn't it?
- [37:21]
D
So from an asset allocation perspective, I mean, obviously I guess you're looking at the traditional assets, bonds and equities, but beyond that, is it real assets, is it all liquid, any privates, any alternatives or where do you draw the line?
- [37:36]
A
Yeah, so at the moment we're just sort of embarking on moving into private markets and illiquids and hopefully the next year or so we'll have established a program probably across infrastructure and real estate to sort of move into real assets. But as things stand today, it's generally a liquid markets portfolio. But if I could just take a quick step back, I suppose maybe think about how we, we talk about how we think about asset allocation, you know, in general, sort of, we sort of run this process that tries to start with beliefs, then map it through to objectives, put a bit of a framework around that and then research and then have a strategy that comes out the back. So it's beliefs, objectives, research strategy. And so we try to spend time on all, all parts of that, but particularly getting the beliefs right can get you quite a long way. And so really, so there, what we're trying to do obviously is returns in excess of UK inflation. I think that's what drives, you know, drives good outcomes for members, members, pensions over time, that's what gives them the ability to accumulate a pension and then, and then sort of spend it down. You know, various beliefs around needing short and long term measures of risk and volatility is not really a great measure of Risk often we're looking more at the chance of a member falling short of that, that long term return outcome. So it's kind of long term probabilities. Some areas we do care about drawdowns because members approaching retirement do care about falls in the value of their pension. So yeah, your beliefs can set out some principles around, around how you're going to do it and then you can kind of translate that into clearer objectives. So in the growth phase, inflation plus 3% inflation plus 3, 4%, you can generally show that at the current contribution levels that that is a decent kind of accumulation rate that gets people to a decent place. And then when, when people are approaching retirement or at retirement, it's inflation plus a little bit, maybe inflation plus 1%, one and a half percent. Something like that is, is more what you're, what you're sort of going for there. So that, that gives you a bit of a return, you know, hurdle to go at. And, and if you focus on the, and, and that sort of mirrors the, the two asset allocations that we run. Really we got, we got one main default and that, that has two main components to it, a sort of growth component and the pre retirement component. So pretty kind of clean structure and those kind of growth returns, you know, say inflation plus 3 to 4%, that's a sort of an equity ish return. And a lot of our peers are 100% equities at that point. But we sort of hold a belief that there is some value in a slightly smoother return stream than that. And our kind of philosophy there is that we would like to see different return drivers driving that, that growth, not just equities. So trying to put together a growth portfolio ideally that leans on equities, fixed income and real assets as kind of three growth drivers that are kind of working together to deliver sort of equity ish like return in the growth phase, which is basically what we're here for. And then the pre assignment phase, as I say, that's quite different. That's a much more focus on getting the drawdowns as low as possible, but still doing a little bit better than inflation. Not surprisingly, that's more of a fixed income, short dated type allocation that you sort of get to there. But we also work in terms of trying to map those targets to kind of a reference portfolio which we can then map down as a bit of a clearer benchmark for the asset classes because those inflation targets are, are, are a great starting point. But they're obviously not, they're not investable directly. So they don't give you as good a day to day benchmark as you might need.
- [41:18]
D
Yeah, interesting. I mean obviously it's, you're not, you're not all in on equities. You're saying you're kind of diversified growth in the sense of real assets and presumably in fixed income you're looking at credit as well. I mean obviously it's been a tremendous run last, last 15, 16 years bull market since 09 which begs the question is there tougher times ahead at some point and what that might look like? People always point back to say 1966-82 we had high inflation, asset markets went sideways and investors had suffered real losses I guess or negative real returns in some asset classes. I mean I guess that must be a key consideration in your mind but is there anything you tactically would do about the risk of that type of scenario?
- [42:11]
A
Yeah, I mean look, we're still pretty equity heavy right? So we're by no means bearish or pessimists on the equity front. But yeah you're right equities have had a great 10, 15 years. Strategies that were 100% equities have done really well. So well done. To the people who embrace equities to that extent what I would say is looking back at longer term studies and actually, actually I just got an email. The 2026 UBS Long Term Return study is out makes this point again that actually over the long term balanced portfolios that are majority equities but have fixed income in them as well have actually done almost as well as just equities. You don't give up tons of return for the balance but you do have a much smoother ride on the volume front. So I think that's probably where we're coming from. It's not so much saying oh my gosh, terrible things could happen to equities. We're bearish and we're going to get all defensive. It's more just saying well equities are great but maybe there is a bit of value in just trying to take a slightly more balanced perspective on it than being 100% kind of equities.
- [43:21]
D
I mean there's a whole raft of issues even for a long only equity investor in terms of what's your UK based and a lot of talk about, about you know, the UK market has been abandoned by UK investors etc. Equally, you know, you take a global index you end up with a lot of US exposure, a lot of concentrated exposure in high growth technology stocks. So what's your starting point about what's the sensible way to, to think about your equity allocation.
- [43:49]
A
Yeah, so the starting point is the right question and ours is global market cap starting point. That's, that's, that's a clear sort of belief that we have there and I'm pretty, yeah, I'm definitely on the side of, as I said, of market efficiency in that sense is that the starting point in global listed equities should be global. I think in other asset classes, by the way, you can justify more of a home bias for different reasons. But in global listed equities, I think they do a pretty good job of pricing. In the future, if a particular region is going to have better revenue growth or EPS growth, that will be reflected in the prices and therefore reflected in the allocation. So this starting point is global. But like in so many areas we do set ourselves up so that we can control those allocations ourselves if we want and make changes to them. So it's, we have a regional approach to our equity benchmarks, for example, so we have a North American portfolio, European, Japanese, uk, Asia Pacific emerging markets sort of thing and we allow ourselves a bit of a tracking error budget to lean into those allocations a little bit. But we try and keep ourselves honest by not trying to deviate too much from the global, the sort of global sort of portfolio we. Because obviously we've seen over the last 10 years it was very fashionable for a large part of the last decade to be underweight in the us overweight emerging markets. And until recently that had been a very, very painful trade. So I think you got to be really cautious in, in the sort of way you're doing it. But the concentration point is a really good one. So that, that is, I, I will take that, although I'm sort of quite, as I say, quite far on the efficient market side. I think that is a sort of a legit knock on the global index approach to the world that there isn't a great answer to. It would appear that those global indices are somewhat lacking in diversification, you might say, which is a bit of an odd, bit of an odd thing to say. So, yeah, there's a few levers you've got to kind of lean against that, but one of them is to sort of cap your. If you've got that regional approach that we've got, you can sort of put a cap on your US exposure, let's say half the portfolio, let's say, which then kind of waters down the effect of that concentration a little bit. So I think concentration is something to think about. It's difficult to come up with a good sort of theoretical market efficiency type argument around it as I think people will have their own approaches to it. But that's certainly one of the things that's in our mind when we're looking at those regional allocations and, and the concentration there trying to get proper diversification in. I think the way things have gone. Your US vs Rest of World allocation is one of your top level strategic decisions as an asset owner these days. It's going to make a big difference. It has made a massive difference over the last 10 years. Obviously last 10 years more us the better going forward. That's going to be a big decision. And our stance has been lean slightly away from the US and more towards rest of the world, which is yeah sort of done okay I suppose last, last year or so but we'll see. And another one is, is, is obviously what you do with the dollar and your currency hedging there in terms of, in terms of that the, the global indices as well as being concentrated in technology and in certain companies obviously give you a lot of dollar exposure and yeah written multiple very long papers on, on what that means and, and what you should do with it. I think there's quite a good argument that from a UK investor perspective it's actually a pretty decent, decent hedging asset to hold dollars. And so you should think, think hard about how much of that you want to sort of hedge away. It might be quite nice to hold dollars. There have been certainly been certain regimes post 08 where holding dollars is kind of almost like a free tail risk hedge. So that's another thing we do think about a lot what we're doing with those dollars.
- [47:42]
D
And is that something that you would review? It's part of your kind of quarterly process. Obviously there's a lot of now debate to the dollar as you say it has had that role risk off characteristic in stress periods which has been beneficial say for non US investors. But obviously we've seen a shift in sentiment in the last year. People questioning will that always be the case. You can get carried away by the news and the short term sentiment. But there is a structural argument there that might play out over many years. What's your thinking on that?
- [48:15]
A
Yeah, I mean it's something we, we, we review. We've been doing quite a lot of work around it recently. It's such a hard, always such a hard topic to pin down because there are so many ways of approaching it, so many angles to it. We can't take the view that you've got to try and step away a little bit from the. Just a view on the levels of the currencies because, you know, who knows on that really, they really can go in any direction. I think the analysis we've seen that managers have done for us and so forth and unless Sterling is at very extreme valuation levels, it is quite hard to forecast the trend. What you can get a bit more confident on is the risk properties. So what happens to the dollar in sell offs? But again there you've got very much a sort of a regime type thing at play where since 08, which is nearly 20 years now, the dollar's been a really good risk off hedge generally between sort of 1970 and 08 it was sort of of fineish actually. There was some, there's some stuff on this in that latest UBS yearbook as well. I was looking at it yesterday. If you want to go even back before 1970s, which is a bit questionable how relevant that might be. But it's got different properties again. So even with the risk side you've got a bit of a sense of are we still in that kind of post 08 regime in terms of how it's behaving? There are some arguments that it's might have changed but you know, has it really. Do we really think the dollar's not going to strengthen if there's a big, a big kind of sell off? And obviously the other point is you don't have to choose all or nothing in terms of the hedging. You can have a percentage level and then it's just kind of, well, what sort of range do we think is decent? Where do we want to be in that range? How much flexibility do we want to sort of give ourselves? So those are sort of the things where we're trying to nail down. But whether the pound goes up or down against a dollar is something we try not to stake too much of a, you know, a view on unless it was at really extreme levels. Which, yeah, to be fair it was a couple of years ago obviously, but, but more recently it's, I think it's not really been extremes in the last, last little while.
- [50:20]
D
Yeah, I mean the other area which, you know, you talk a bit of deficient markets hypothesis, I suppose the other areas where it might have been breached is with kind of factors and, you know, style, premium quality or size and momentum and things like that. What's your thoughts about integrating those kind of factors into the long equity portfolio?
- [50:47]
A
Yeah, that's certainly something we're doing a little bit to Some extent. I mean our emerging market equity portfolio that we've got with Rubico integrates factors and it's something we're looking at more widely. I mean I've got a decent amount, I'd say now I've experienced with that over the last 10, 15 years in previous roles have advocated reasonably strongly for factor based strategies and then obviously saw, yeah, there was some pretty ugly performance there in that kind of, I don't know what was it, 2018-2022 type window. So I think you've got a, any sensible strategy there has to learn the lessons at that period of time and has to have a sensible answer for what went wrong there and why and what have you done differently. My take on it is that yeah, it was particularly value that got very, very bad or Value in the US got very badly hammered over that period of time and some of the multi factor approaches in hindsight were a little bit too overweighted to US value. And so it's something that really ensures it's not suddenly getting over its skis to any one factor and also feel that momentum was the thing that has sort of saved some of the, some of those multi factor things recently. And sometimes momentum gets underplayed because there's a bit of a sense like is it a real factor sort of thing. But the data would show you over the last few years that you definitely need that there, you want that to be there and have a strong, strong presence in the signal as well to be able to sort of work. So you know, I'm not sitting here saying I've got the best factor models myself or obviously we're an allocator so we're looking, looking at, to managers to say well have you learned something from that period of time? What have you learned? How can you sort of be sure that your factors are more kind of evenly spread today? But looking around the world, I mean actually factors work pretty decently in EM for most of that time. So when you look back at the data it was the US experience that just really clouded a lot of European values. Worked pretty well for the last few years. So it's about trying to, to make sure that you're genuinely balanced and if one factor fails in one region that doesn't somehow drag down the performance of the whole product.
- [53:04]
D
Yeah, and what about alternative investment strategies like good old sort of hedge funds? I mean in theory these you can access strategies that have a low correlation to equities and boost the Sharpe ratio, more stable risk adjusted returns if you believe or the Literature and the marketing etc, is it that they are not appropriate for an asset owner, for a structure like yourselves or is it costs or would you consider them?
- [53:32]
A
I think we certainly are considering it and starting to look at it. I think where it comes down a little bit to the asset ownership model. Again, because DC has evolved from a basic asset ownership model, those strategies are basically just off the table because the ownership model and the cost constraints just ruled it out from the get go. That isn't the case anymore. I don't think because we've got a more sophisticated, sophisticated model, I'm pretty sure at our scale we could access versions of it that would work in the cost constrained way as well. But I do think again you've got to face into some of the issues that those strategies have experienced. And again, a few of my reflections would be that some of those strategies that did badly were the more where allocators imposed quite a lot of constraints or implemented a more kind of of watered down version of it to satisfy cost constraints. Those were some of the versions that didn't do well. So I think you got to be quite wary of watered down versions of it just to satisfy your approach. The right approach is to get your model sophisticated enough to do the proper versions of it rather than do the kind of dumbed down ones would be one point and then there just has to be enough recognition that generally equities do go up and do do well. So they shouldn't be a about totally trying to hedge and shouldn't focus too much on spending a lot of premium on reducing risk because that is just over the long term, that is just a drag. So. So you've got to find strategies that make sense in that long term growth context. We're not looking at hedging this quarter's returns, we're looking at something that works over the long term. And I think again, some of the strategies that have underwhelmed in the 2010s got a little bit obsessed with trying to control risk to the nth degree to the point where you pay it all away in premiums and you're left with something that doesn't really do much after fees. I still think there's some good there and I would love to look more at how we could bring some of those hedges into play a little bit in a sensible way in a construct that doesn't bleed away too much premium, doesn't pay excessive fees and works against that longer term, that kind of equity stream. But that's definitely a sort of next couple of years type project, I'd say for us.
- [55:53]
D
Okay. I mean the big buzzword in pensions and public pensions has been TPA total portfolio approach. Is there something relevant in your model? You know, being a DC provider, but obviously you do have the kind of flight path offerings. How do you think about tpa?
- [56:11]
A
It's definitely relevant. It's a helpful framing to think about some of it because it again just goes back to the asset ownership model point. You know, one of my sort of views, maybe slightly pushy views, is I think the concept of TPA almost originated with some of these much larger asset owners where the internal team became very large and things became awfully siloed between the different asset classes. And so they needed a way of kind of reinventing a more centralized process that could be a little bit more nimble. Now if you set yourselves up with a smaller, more focused internal team, like I said at the start, then I think you're naturally thinking in that way way a lot more just the way we've kind of set the team up naturally sort of engenders that kind of cross asset collaboration and the kind of single centralized group that's taking decisions across the portfolio is. Yeah, it's not far away from what we're trying to do. But on the other hand, D.C. members, I think broadly do want an SAA type thing. I don't think you can take it to the extremes DC members are expect. I think that they have a right to expect a certain sort of asset allocation and to be able to have a sense of this is what the equity bond, real asset split is. I think intrinsically that the members do want that. So I don't think you can take it to the nth degree of saying, oh no, we'll deliver CPI plus 3% but it could be anything in that portfolio from one day to the next is probably not the way to see it. But yeah, as soon as you're working in an internal team, you become quite tuned in to this balance of governance between it being team centric and board centric approaches, with a board centric approach being very much here's the sea. We sign it off with some ranges, you go and implement it. The team centric approach being where you have a lot more freedom. And yeah, when you're operating in that environment like we are, you get quite tuned in to the differences there. And we're definitely debating where we, where we want to sit on the. That where is the comfort that we have with our trustee and with our governance as to, as to how far we could move on it. Where do our regulatory permissions allow us to sit? So I think it's a very useful spectrum as you're considering your ownership model and your governance. But I think in some ways it's been sort of invented as a solution to a problem that we don't have at the moment as a relatively smaller, more flatter asset owner.
- [58:33]
D
Fair enough. I mean you talked about balance scored card in terms of evaluation of external managers, you know, the manager selection process, in terms of how you think, you know, people's partnership, that the investment team themselves should be evaluated. How do you think about that and is it balanced? Scorecard? Presumably it's not just returns, you know, performance over what kind of time period and what other factors are relevant?
- [58:59]
A
Yeah, I mean in terms of the performance, it's a three lenses approach and even just looking at performance is quite, quite, quite complicated and nuanced because you got three different benchmarks effectively and then you've probably got at least two different time periods that you care about. So you got like at least a six factor scorecard just on performance. But the three lenses on performance are peers, reference portfolio and the inflation targets of the funds. So those are three different comparators. They all give you different but useful information. They can all tell you slightly different things at different times. So I think you need to synthesize all those together. And then in terms of timescales, I am a fan of looking at long term returns, which I think generally means at least trailing five years. So I love to focus on like a trailing five year number. But the issue is that doesn't change very fast. So you also need to have a pulse on what's going into the front end of that five year. So I'd often like to look at the one year, five year. So you look at the last one year year and the trailing five years against each of those kind of me measures and you can sort of put that into like a red, amber, green type scorecard to get a pulse of, of where you are. And then again we have to do that across the two different products. So you start to see how the returns monitoring thing becomes quite quite complicated. But I'm a big fan of having a, a clear, repeatable framework on that stuff because the worry in investing is you can just show your stakeholders a slightly different, different picture of returns every quarter. You can always find the number that looks good and show it. And you really shouldn't do that because what's better is to say let's agree that this is the Framework, every quarter will show you the same thing and we'll stare at the same 12 numbers and over time we'll sort of get some really useful information out of that. So yeah, it took us a little while to settle on that perspective. But that's similar to I think how the Aussie super funds would do it in terms of that, that peer view, the rel, the reference portfolio and the inflation targets view. And obviously, yeah, as I say, out of those, the reference portfolio is obviously completely investable. So that very clearly drills down to the exact benefit that the team has sort of delivered versus something else that could have been pursued. It's a very, very clear counterfactual. The peer group is also so more or less a counterfactual. So I think it's quite helpful to know what would our portfolio have done had we sort of outsourced it to the peer group. Yeah, albeit not quite as directly investable. It's harder to stick that into a, you know, a bar model and get a track and error out of it. But you got a rough idea. Then you got the inflation targets which are sort of more of a, they're obviously more of a longer term kind of, kind of guide and they're absolutely not investable. I would love to be to able to invest in something that could do CPI plus 3% but of course that doesn't exist. But they, they're the sort of longer term yardstick that you want to be, you want to be near to. But obviously recent years those have been really challenged. So that's been one of the issues of. Yeah, with 2022 being still within the five year window, you know, it's been a real struggle to get, to get funds in line with even quite modest inflation related targets. Even if all the theory says that it should be very achievable to do sort of inflation plus 3%. No one was doing that during 2022, 23. Sure, yeah, we're over the five year now because equities have been strong. We are just about ahead of that over the five year view now, which is obviously really nice. But that was tricky during that period of time as well, which is why you need to have the other views on it because if you're offside on that measure you might not be doing anything wrong because the peers and the reference portfolio might have the same issue inherent in them and you might have even done slightly better than peers but worse than the reference portfolio kind of thing. So those three perspectives have been quite helpful in looking at returns. But it Means that it's a slightly more nuanced conversation than just are you up or down?
- [62:59]
D
Very good. Well, I'm just conscious of time. We do like to run wrap up, just getting some perspective. Obviously you've been in the markets a while on the consulting, the investing side, I mean, for people earlier in their career are looking to develop a career as a CIO in a, either as an asset owner or elsewhere. I mean, what would you suggest or what are the things that were helpful for you through your career, would you say?
- [63:21]
A
Yeah, a few things. I mean I get asked that question a little bit. I mean one thing that was really helpful for me, starting my career at a consulting firm and a global firm firm was really, really beneficial, especially that period of time got us all sorts of insight into how loads of different pension schemes operated. As a consultant you get exposure to loads of managers. So that breadth of exposure for me was super helpful. But not everyone's going to be going to be in that position. So a sort of more general piece of career advice that always served me well is I think really making the most of every kind of opportunity you're in and really, really learning your craft in every single role. Because I think sometimes people can be very focused on, right, I've got a role, what's the next thing, what's the next thing. And people can be very, you know, might do a year, 18 months in a roll and be very keen to move on. Whereas I think there's real value in, as I say, taking out at least three, three, four years in a role, I think is what it takes to learn the craft of that role, right? Really deep, deeply learn it and understand it and appreciate the situation you're in. Because every situation is going to be a bit unique. For example, you might be in a global firm, in an overseas office, you might be in a UK firm, in a UK office, it could be a founder led growth company with very particular kind of company. It could be an employee owned partnership, it could be a profit for member organization. I've worked for all those kind of organizations. They're all brilliant in their own ways. They all have their own issues, issues. And unless you spend real time in it and really kind of absorb it, I don't, I think you can risk not really taking that lesson on properly in your career as to what it's like to work in the overseas office of a European company or the UK office of a US company, you know, or work for a cyclical or countercyclical part of the business. So I Think learning your craft in each area is really important and then sort of developing that a little bit more. I think, think when I interview people, what is often deeply impressive to me is when someone is sort of able to say, right, here's my philosophy of how you should do XYZ thing. And in some ways the more simple that XYZ thing is, the better. Right. Because it shows they've really thought about something quite simple and it shows a lot of agency and curiosity and loads of good things. So it's one thing debating your philosophy of investment investing, but, you know, let's say something as simple as what makes a good end of day email to go out to an asset owner. Yeah, it really impressive if someone says, hey, here's my philosophy, what should that be on that email? Because I've spent time thinking about that. I didn't just do what my boss told me to do. I thought to myself, what are the people reading it want? What helps? What decisions are they going to make? What are the information that they need to make those decisions? How can I make it quicker? How can I make it more accurate? Yeah. So a lot of people will just sit there, do what their boss told them to do and then pass it off on. Whereas if you spend that time learning your craft and really think, you know, what is my philosophy of how to do this very specific thing, I actually think that's very impressive to people as you go through your career and you build up a series of those sort of philosophies and obviously you can sort of go up the ladder when you're early in your career. It might be, what's the philosophy of how to send out this email or do this very specific process as you get further along in your career. It could be a philosophy of how you run a team, how you run a portfolio, how you build an organization, you know, so. So you can't jump straight to that. I think you've got to learn how to build it up by thinking that. But it is a different way of thinking that sort of, as I say, it shows, I think, a bit of curiosity but also a bit of agency that you can actually go and own something and change something. And that to me, I think is always differentiated and is always impressive.
- [66:59]
D
Very good. Well, I think that's definitely good advice and we should all reflect on our end of day emails now and philosophy. But thanks very much for coming on, Dan. It's great to get that perspective on the DC pension landscape and the tremendous growth in that side as well. And for anybody who wants to keep abreast of your work? Obviously, your LinkedIn newsletter, I think it's called your Thursday investment Fix is probably the place to find you. But thanks a lot and from all of us here at Top Traders Unplugged, thanks for tuning in. We'll be back again soon with more content.
- [67:35]
B
Thanks for listening to Top Traders Unplugged. If you feel you learnt something of value from today's episode, the best way to stay updated is to go on over to itunes and subscribe to the show so that you'll be sure to get all the new episodes as they're released. We have some amazing guests lined up for you, and to ensure our show continues to grow, please leave us an honest rating and review in itunes. It only takes a minute and it's the best way to show us you love love the podcast. We'll see you next time on Top Traders Unplugged.