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Mark Wiseman, the Executive Vice-President, Investments and incoming CEO of the Canada Pension Plan Investment Board (CPPIB) (Angus Rowe MacPherson/Angus Rowe MacPherson)
Mark Wiseman, the Executive Vice-President, Investments and incoming CEO of the Canada Pension Plan Investment Board (CPPIB) (Angus Rowe MacPherson/Angus Rowe MacPherson)

ROB Magazine

Inside the Canada Pension Plan's $153-billion portfolio Add to ...

In 2000, Wiseman and Moffat moved back to Toronto, he to work with investment über-mensch Brent Belzberg at Belzberg’s Harrowston Corp. (Moffat now runs the mortgage business at RBC.) Belzberg, one of the most focused and best-connected private equity managers in Canada, remembers Wiseman as a “force of nature,” and also highlights his obsessive focus on finding the best investments. To Belzberg, Wiseman epitomizes a famous saying of former Intel CEO Andy Grove: “Only the paranoid survive.”

Wiseman, still in his 20s at Harrowston, had already established a reputation for working brutal hours and answering all e-mails within minutes (which is still true today). He quit Harrowston after it was sold to TD Capital in September, 2001. When he turned down Belzberg’s offer to help start a new investment firm, Wiseman was at loose ends. “No one was hiring after 9/11, and I thought it was over,” he says with a smile. But he didn’t have to wait long for an offer. He received a call from Jim Leech in the private equity investing group at Ontario Teachers’ Pension Plan. Wiseman soon began a four-year stint there.

Wiseman potentially has almost a quarter of a century of managing the investment board before he gets his own CPP payments. He states his goal simply: “to find a group of people, and manage them to make sure that the investments they make will do better than picking just anything to buy.”

When pushed to name some of the issues the Board has to deal with, all that senior managers talk about is minimum investment size. If each investment were as “small” as $150 million, that’s more than 1,000 investments to manage—an oversight nightmare. CPPIB’s minimum investment cutoff now is in the range of $75 million to $100 million for private equity investment. That cuts out a lot of interesting opportunities.

A related issue is the how-to and who-to and when-to of selling large-scale investments. It’s one thing to write a cheque; it’s another to convert an investment into cash. Public markets are tricky, and CPPIB will eventually get stuck with some albatrosses.

Hiring is also a special issue at CPPIB. Attempts to find great people can be a little stressful for management. A couple of times, Wiseman and his team have had people bail at the last minute after signing up to work in senior positions at the firm. Wiseman takes it all very personally. He realizes that the issues for the last-minute walk-aways have been complicated, including rigorous competition for talent from the companies the Board invests with. The big issue is the superior compensation the private sector can offer.

Yet to any normal working person, the compensation received by senior management and the investing staff at CPPIB is plenty generous. Wiseman made north of $3.1 million in fiscal 2011; yet, to prospective hires, he says, “Don’t come here looking for a fat paycheque.” He and others liken their job to a public service—and there is indeed some sacrifice involved, but only by the standards of the investment industry.

In any case, there are other attractions to working at CPPIB. Ask Eric Wetlaufer, 50, the first senior executive who is not Canadian to make the move from the heady investment world in the U.S.

“I’m an investor, full stop,” says Wetlaufer, who has been running active investing for the fund for less than a year. He came because he thought he would find the perfect world of investing. No restrictions on where to look and what to put money into. No cap-in-hand looking for money for a new fund every five years or so. Equities, fixed income, commodities, short-horizon trading, strategic stakes in public companies, they’re all good. An investment job “where we are limited only by our creativity” is, to him, a dream job. Then he stops himself: “Wow, that sounds a lot like Disney.”

And there’s another thing, he says: “I really like my boss.” Indeed, Tim Hodgson counts another competitive advantage in CPPIB’s ability, led principally by Wiseman and Denison, for finding and keeping investment talent for the firm.

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The Board can think—and has had to think—about more radical approaches than almost all other investors, who typically have to stick to a defined mix of assets: this much in stocks, this much in real estate, and so on. CPPIB’s solution was to start a unique investment philosophy that differed radically from a normal asset allocation strategy—one that they, and now others, call “risk budgeting.” In tandem, another new strategy is to cultivate relationships that will pay off in deals.

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