We pension funds at least have the luxury of not being stuck behind our screens all the time, trading or monitoring our portfolio. Our custodian bank has an app that allows me to view our asset portfolio value and liability-estimate whenever I want to.
While I can mostly deal without checking this every morning and evening, I confess that I have logged in sometimes while on holiday. And at times of market turbulence, like the ones of late, of course we keep a closer watch. Still, sometimes we have to remind ourselves that we have a multi-decade investment horizon. If we don’t then Rolf, our chairman of trustees, will.
It’s all far removed from the days when we just invested in Dutch government debt on a buy-and-hold basis and in large-cap companies listed at the Amsterdam Beurs.
Then the euro came along, so we diversified our bond and equity portfolios in one go and added European property. After that, consultants recommended we invest in high yield, emerging markets, private equity, hedge funds, you name it. Then we started hedging interest-rate risk using swaps and the FTK came in. Suddenly, pensions were not a backwater at the far end of the corporate finance department. Pensions risk was real.
So while we spend much of our time deskbound, dealing with compliance and regulatory issues or monitoring our portfolio, one of the more interesting aspects to our job is meeting managers, exploring new ideas, and even getting out to see our investments.
One day in early March, I found myself leaving home earlier than usual and turning left at the end of our road instead of right as I was driving down to Düsseldorf to visit a retail complex that we have co-financed in a debt transaction.
After many months of planning, we finally received the backing of the investment committee last December to fund this property debt transaction. And we want to see what we are paying for.
Geert, my able colleague in the investment department, has come down, as has Rolf from the trustee board. It’s time to put on the hard hats, boots and high-visibility jackets as Hans, the investor relations head at the real estate investor, shows us all round.
Rolf, who also sits on the board of a Dutch property company, asks many questions. Hans is keen to tell us how the project is keeping to plan. But the main topic for the day is a seminar on property, infrastructure and private lending opportunities in German-speaking countries.
‘There are very few places we can go so real assets are an interesting option for us,’ says Geert as we walk to the carpark. ‘Correct,’ says Rolf. ‘And if things really do go bad, we always have the comfort of having recourse to the underlying asset. That shopping complex looked pretty solid to me.’
Pieter Mullen is investment director at Wasserdicht Pension Funds