Sticking to one's principles
Q1. Who is or was your main mentor in pensions and investment and why?
Q2. Who do you most admire in the industry and why?
Q3. What event good or bad has influenced how you approach your current role?
Q4. Which investment writers’ books have influenced you the most?
Q5. What is your investment philosophy?
Q6. What are the most important challenges facing the industry?
1. No single mentor - rather more colleagues and leaders in my career. They have taught me to think and act strategically and consistently when making decisions.
2. The politicians and organisations in the Danish Labour Market, who very early took the decision to build up funded occupational pensions. It was a wise and daring move, but they succeeded - not least in gaining the acceptance of the vast majority of the Danish population.
3. The ‘breakdown’ of the financial markets in 2002 was certainly an eye-opener for me. It showed me the necessity of risk analysis. I guess 2002-2003 was a very useful lesson for everyone related to the pension industry.
4. I find most interest in writers that do not write specifically about investments. Michael Porter is one of my favourites and a great inspiration. I read his ‘Competitive Strategy’ from 1980 at the end of my university education. He explains things from a holistic macro point of view that to me shows a lot about the facts and mechanisms behind globalisation.
At that time there was a great belief that absolute cost advantages and simple production were - if not the only - then the most important competitive forces and that as a result all production would end up in Hong Kong or other parts of Asia.
Michael Porter showed that other competitive forces are just as important, for example, learning-curve advantages and government policies. This explains to me why we still manufacture clothes in Denmark and why we are market leaders when it comes to building windmills.
If we isolate any single competitive force and regard it as the critical one, our vision is too narrow. If absolute cost advantages were the be-all and end-all in economics, then a country like Denmark ought to have ended up as a working open-air museum. But we haven’t. Michael Porter explains why.
5. Stick to your principles. Be cautious and careful, but do not be afraid to take a risk - if it is a calculated one and if you can afford it. If you really believe in something then why do it only halfway?
6. The change to market valuations and to the Solvency II regime in combination with low interest levels and increasing life expectancy will keep many pension fund managers busy during the day and awake at night.