A day in the life of AIMCo CEO Leo de Bever
De-Bevering Away: how does the man responsible for the biggest portfolio in the province spend his day?
by Michael Ganley
Leo de Bever is the CEO of the Alberta Investment Management Corporation, the provincial crown agency that manages $70 billion of public pension money and provincial sav ings.
A day in the life of the man responsible for the biggest portfolio in the province.
Leo de Bever (pronounced Bay-ver) is at home in his pyjamas, sipping coffee. He powers up his iPad to check the day’s news. There are 20 icons linking to various news outlets on his homepage, but on this day he focuses his attention on just three. “The Financial Times of London gives me a good perspective on Europe, the Wall Street Journal on the U.S. and the Globe and Mail on Canada,” he says.
He may consume daily media, but de Bever says that in his job, what happens on a daily basis isn’t that important. “I manage money that has to be there for 40 or 50 years,” he says, “and I think of markets as schizophrenic, always vacillating between extremes.” These days, he says, markets are often driven by a speech delivered in Brussels or Washington. “Depending on that, markets take off in one direction or another,” he says. “That’s a very dangerous environment because it’s not logical.”
Each morning there’s also a string of emails waiting for him, and he responds to them in priority as he eats breakfast and gets ready for the day. Many mornings he also gets on the phone, he says, “to one of my guys in Europe or Colombia or Chile.”
De Bever is in his office, a spartan affair lined with pale furniture surrounding a conference table for six. On one wall is a picture of Alice in Wonderland, talking to the Cheshire Cat, who is perched in a tree:
“Would you tell me, please, which way I ought to go from here?” Alice asks.
“That depends a good deal on where you want to get to,” said the Cat.
“I don’t much care where …” said Alice.
“Then it doesn’t matter which way you go,” said the Cat.
“ … so long as I get somewhere,” Alice added as an explanation.
“Oh, you’re sure to do that,” said the Cat, “if only you walk long enough.”
De Bever explains his choice: “We often chase targets that our clients have given us but often our clients haven’t thought hard enough about those targets,” he says. “The object is to think about where you want to go and then figure out how you can get there.” He has 26 clients in total, a mix of public pension funds and provincial savings accounts.
De Bever says much of AIMCo’s success has come from “blocking and tackling” in fixed income investments and in stocks. “We take advantage of mis-pricings,” he says, “and that’s not always easy to do. Right now we’re worried about bond markets underperforming in the medium term, so we’re short duration. We don’t think long bonds are a good investment, and we think government bonds are overpriced, so we have more corporates.”
De Bever meets with a local entrepreneur and inventor who claims to have a technology that will decrease the viscosity of bitumen without using chemicals, temperature or pressure. “Everyone’s saying it can’t possibly work but that’s what they said in 1900 about heavier-than-air flight,” de Bever says. “I can’t afford to be completely skeptical.” He says that out of every 100 people that approach AIMCo about an investment, 10 may be of interest and one or two might warrant an investment. He arranges to have an engineering firm analyze this man’s technology and pledges to tune into his field trial the following month.
While eating his sandwich, a piece of a filling falls out. He arranges to see his dentist.
He joins a meeting of government and industry leaders to discuss ways to get small and mid-sized companies financed. He says there is money available in the province, but that small companies often lack experienced managers. “A lot of entrepreneurs have a great idea about some technology but they can’t manage their way out of a paper bag,” he says.
The focus of the meeting is Alberta, but de Bever’s sandbox is global. “Alberta’s economy goes up and down with oil and gas,” he says. “Both the government and the employers for whom I manage pension money are exposed to that up and down. The notion, then, is that we should invest in stuff not correlated to that up and down.”
AIMCo’s international portfolio includes, among many other things, 1,500 square kilometres of forest in Australia and 50 per cent of a 90-kilometre toll road running through the middle of Santiago, Chile.
Dentist’s office. Filling repaired.
De Bever reviews AIMCo’s internal project to replace its computer systems. “It’s probably the most complex business IT project of any organization in the pension world,” he says, “so we want to make sure we get it right.” Modernizing the operational foundation of AIMCo has been an ongoing project since de Bever joined the company in late 2008. “When I first got here, I would ask a simple question like, ‘What is our exposure to Citigroup?’” he says. “And the answer was, ‘Let’s go away and spend the next eight hours trying to figure that out.’ That’s not good enough.”
De Bever interviews a job candidate, a Canadian living and working in London who wants to come home. One character trait he looks for in his hires is humility. “We want people who do not get too carried away with their own importance,” he says. “The moment you think you know what’s going on and have it all figured out, something comes along to tell you otherwise.”
He also sees a variety of staff who drop by to consult with him. “I have a decentralized style,” he says. “I let people run their own areas to the extent possible, but they’ve learned that if they want my support if things go off the rails, they should keep me involved in what they do. So when it does go off the rail, and it occasionally does, I can say, ‘I was there and looked at it and backed the decision.’”
De Bever prepares his remarks for the company Christmas party the following night.
At home in the evenings, de Bever will often take phone calls from board members. AIMCo has an all-star board, including Chair Charles Baillie, Clive Beddoe, Daryl Katz and Mac Van Wielingen. “Our governance is pretty tight in that we have a demanding board,” he says. “That’s a good thing, but sometimes it’s hard for them to understand how complicated this organization is. They run their businesses and sometimes the stuff we do seems airy fairy, but this is very different. It’s not an airline or a drug company.”
He will also spend some time reading things he didn’t get to during the day. “Frankly, it’s a losing battle,” he says. “I look at the stuff that piles up and I have to be very selective in what I read.”
He’s also something of a history buff, in part because of the whole those-who-don’t-know-history-are-doomed-to-repeat-it thing. “I find it fascinating how we make the same mistakes over and over,” he says. “The current episode is very much like the ’30s, when the French were ganging up on the Germans, and you know how that ended up. Now the Germans are ganging up on the Greeks and the Spanish, and I don’t think that’s going to end up happy, either. The question is, is there an opportunity in there to make money? It may sound ghoulish, but someone has to step in to right the ship.”
- Leo de Bever was born and grew up in the Netherlands.
- He has an economics degree from the University of Oregon and a PhD in economics from the University of Wisconsin.
- He joined the Bank of Canada in 1975, rising to the position of chief forecaster by 1980.
- He was chief economist and vice-president of investment administration with Crown Life Insurance from 1986 to 1991.
- He served 10 years as senior vice-president of research and economics for the Ontario Teachers’ Pension Plan.
- Just prior to joining AIMCo in 2008, de Bever was chief investment officer with Victorian Funds Management Corp., one of Australia’s top public sector pension funds with $35 billion in assets.