It is a windy morning at the end of January and I am driving to a conference in Amsterdam. I am asked to speak by a group of Dutch community groups and charities. Bart, an old friend and former colleague, has become chief executive of one of the large charities and sits on the board of the representative body for Dutch non-profit organisations, where he is taking a particular interest in investment matters.
Bart spots me from the other side of the room as I arrive and looks pleased to see me.
‘Our investments were so unprofessionally managed before I started,’ he tells me. ‘We had a relationship with a small private bank for years due to the personal connections of the previous chief executive and our investments were in Dutch equities and cash. The fees were horrendous and as for diversification - forget it.’
As I enter the conference hall with the other delegates, their badges reveal a wide range of organisations - religious societies, community development charities, wildlife sanctuaries and health campaign groups. I furtively check my BlackBerry during the first couple of sessions, in which a serious-looking lady is talking about raising funds for sufferers of a rare disease, and a green campaigner is urging direct action against climate change.
The audience listens politely to my speech. I talk about historically low interest rates, diversification, active and passive management, market volatility and investment management fees. Frankly, they look baffled at the end of it.
Hopefully, Bart can help get a good discussion going as chairman of the panel session afterwards. The rare disease campaigner is on the panel, as is the treasurer of a religious charity based in Groningen. I vaguely recognise the campaigner from the television - it turns out she appears regularly to promote her cause but she used to have a career in banking, which is why she runs the investments of her charity.
She talks about links between the financial and medical establishments, which she uses to argue against mainstream investments. Her assets are invested in cash with ‘ethical’ institutions and micro finance. The treasurer talks about security of assets and the need to plough money back into the community through building projects. It turns out his charity is one of the richest in the Netherlands.
No-one seems particularly interested in my discussion of investment beliefs, and the need to align them with the aims of the charity in question. The point is soon lost in a discussion about government funding, about which the other two panellists disagree violently.
Afterwards, Bart tells me: ‘It’s early days with this lot. I am trying to channel their enthusiasm into investment professionalism.’
I thank Bart as I leave. Just give them IFRS, FTK, longevity and a set of liabilities to manage. That will sharpen their investment professionalism.
Pieter Mullen is investment director at Wasserdicht Pension Funds