Diary of an Investor: It’s all about feeling in control
Our friends at PensionKøbenhavn have been visiting us here in Amsterdam. Last year, our two boards signed a mutual co-operation agreement with our Danish counterparts to start investment joint ventures. More informally, we both hope that we will also benefit from regular sharing of investment knowledge and experiences.
The plan is to get the first joint venture going this year. But first things first. We have to get to know each other properly and make sure both parties feel in control.
After a typical Dutch lunch of rolls and bottled milk, we discuss our planned joint venture investments all afternoon and hear what our Danish friends have been up to recently.
Kristine from PensionsKøbenhavn gives a presentation about Danish funds’ activities in real estate and infrastructure loan deals and Rolf shares his views on the Nordic equity markets.
Then Geert, our investment strategist, speaks about the trends he is seeing in the private equity market. On a recent trip to the US, he learned that US institutional private equity limited partners are taking a much more engaged role with their GPs, sometimes holding closed meetings without the GPs present at all.
We have a long discussion about private equity. We all agree on the long-term potential of the asset class, but that it is necessary to rationalise your portfolio. ‘In the Netherlands, the story has been about identifying your objectives and you need to be in control.’
Later on, we have a beer in Utrecht, where the Wasserdicht investment headquarters are located. Kristine warns Geert not to overplay the similarities between Dutch and Danish pensions. ‘We moved away from defined benefit a long time ago. It’s much easier to control the liabilities.’
Later, Rolf shows me his latest toy – an interactive dashboard for pension liabilities and assets launched by his custodian.
Rolf was a late starter when it comes to the new mobile-phone technology but now he has downloaded his custodian’s app onto his new smart phone. ‘When I turn it on I can see at a glance the funding level and the market value of the assets,’ he says proudly as we clink glasses.
‘And what do you do about it if you don’t like what you see?’ I ask Rolf. ‘Well, as it happens, most of our portfolios are doing pretty well at the moment, you see, Peter,’ Rolf replies with a self-satisfied look on his face.
‘And our solvency ratio is very healthy. But, of course, it depends on what’s going on. For example, our Asia equities portfolio manager has not been doing too well, so last week I called him to have a chat,’ he continues.
‘Did you sort out the problem?’ I ask. ‘Admittedly not, but it was a good feeling to be in control.’
Pieter Mullen is investment director at Wasserdicht Pension Funds