In Episode 128, we welcome pension fund expert, Claude Lamoureux. We start with Claude’s background, which took him from Met Life to running the Ontario Teachers Pension Plan.
When Claude took over the pension, the fund was invested in just Canadian debt, and the size of the pension obligation was underestimated. Claude decided to use derivatives to diversify the portfolio. He expanded into the S&P, recruited an investment department, and within three years, had successfully reallocated the fund into the broad asset classes they wanted.
Meb asks how investing is different for a pension allocator versus an individual investor managing his own portfolio. Claude tells us that in the pension world, people don’t want to take responsibility. He wanted to do the opposite. He wanted to create a culture where people become entrepreneurial.
This dovetails into a conversation about valuations. Claude is a big believer in having a realistic valuation of liabilities and potential returns. He mentions that today, many U.S. pensions are expecting around 7% returns, which he finds unrealistic. Claude says people should earn the money before they spend it.
The conversation eventually turns toward Claude’s general market approach. Claude had a somewhat traditional policy portfolio, yet used lots of derivatives to diversify into stocks and non-Canadian bonds. He mentions how when you have a large deficit, you must go heavily into equities. He also liked private equity and real estate. And there was a great deal of leverage.
The conversation turns toward problems in the U.S. pension system. Claude gives us his take on the issue. In short, many pension liabilities here in the States aren’t measured properly. He also mentions interest rate assumptions and the fees of outside managers. Finally, Claude points toward politicians and how they don’t want to face the facts.
There’s plenty more in this pension-themed episode: the importance of being a student of the market history…the Canadian Coalition for Good Governance…the sage advice of “when you have to make a decision, always make the one that will let you sleep better, not the one that will let you eat better”…and of course, Claude’s most memorable trade.
All this and more in Episode 128.
Today’s guest is Andrew Peck, co-CIO for Baron Capital, which is known for its long-term, fundamental, active approach to growth investing.
In today’s episode, we’re talking to a growth …
Today’s guest is Jan van Eck, President & CEO of VanEck, which offers value-added exposures to emerging industries, an investment management firm that manages $85 billion.
In today’s …
Today’s guest is Sajid Rahman, Managing Partner of MyAsiaVC, an early stage venture fund, and the co-founder & CEO of Digital Healthcare …
Today’s guest is Tim Laehy, a long-time CFO that’s taken 3 companies public and raised over $3 billion dollars in his career.
In today’s episode, …
Today’s guest is Antti Ilmanen, Principal and Global Co-head of the Portfolio Solutions Group at AQR Capital Management and author of Investing Amid …
Today's radio show is with Meb Faber, Justin Bosch & Colby Donovan. We cover:
You can listen to episodes right here on the website, or if you prefer, in a podcast app. Listening in an app makes it easier to keep track of what you’ve already heard, listen without using your data plan and many other conveniences.