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Marlene Puffer

lines on the record: 77
first: 2023-09-11
most recent: 2023-09-11
sittings or episodes: 1
sources: podcast

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“We spent a lot of time educating the board about the use of leverage inside of the pension fund to actually reduce the asset liability risk. So that was the first major hurdle to get over was having a very clear discussion about how much do you need in terms of fixed income to get the level of interest rate hedging you want, how much in the way of return-seeking assets do you need to then generate the return you want to generate given that risk profile? And if there's a gap in there, we need to fill that with leverage and an overlay of an absolute return strategies to additional alpha on top. So that way of thinking about the asset liability problem and that framework takes a little time to educate the decision makers about.”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“Equities and other private assets, and what should we be doing in terms of interest rate hedging? That was the big problem I was in there to solve and to shift culture into a more modern style of management.”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“That had a terrific track record, and then it was known as a very innovative place for many years where they were involved in derivatives markets, they were involved in all the private markets doing funds and co-investments and direct investing in ways that you would not expect from a plan that size when you think about American plans of that size at all. Very sophisticated, very similar to the larger Maple Aleight long before the Maple 8 were the Maple 8 in Canada. I went in there with a very strong base of what the organization was already doing. And my mandate was primarily around increasing the transparency and involvement and client centricity of the organization to really be understanding asset liability management problem of CN as a corporate plan, which was very, very well funded. But the idea was, well, do we really need to have a risk profiling the investments that's so heavily weighted to?”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“It was a wonderful period. I was brought into Sienne Investment Division as the CEO of an organization that had already been around for fifty years as an asset management organization for a corporate pension plan. Really an unusual entity that had a long history of internal management. When Americans think about it, a pension plan around $20 billion, they think of that as being an externally managed fund of funds. That's not what CN was at all. It had been run for thirty years by a man who was a bit of a legend in the Canadian pension space, Tulio Sadraski, who really took it from investing in fixed income at its infancy to investing in Canadian equities, to then globalizing once the foreign content rules for Canadian pension plans were lifted in the 90s, and he really created an outstanding public equity team.”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say our ideas were a little ahead of our time on how to really bring the best of institutional management to the smaller pension plans. The power of the consulting community is still very high and was during that period. So we had gatekeepers that made it very difficult for us to really get at the decision makers we needed to get at. And those gatekeepers were at the same time creating their outsourced CIO model. It became very difficult to compete against that when they already had the relationships tied up.”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“my DNA and the opportunity eventually came to join some really impressive colleagues and to start an asset management organization from scratch with the goal of bringing institutional style pension management and advice to the smaller pensions and to do that in what we thought was really intelligent way. We weren't all that successful and I ended up going to see an investment division as the CEO to run a $20 billion plan there.”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“And I thought I was actually going to stay there for a while because there were a lot more interesting things to do in that spot than I thought. I actually got lured away from there as an interim step by BCA research, where I became the global fixed income strategist. And that was an interesting role global clients, global travel, really challenging writing investment research on a weekly basis that is supposed to be at the top of everybody's pile to read. That was also sort of entrepreneurial. It was a relatively small company. Had a really great global footprint, but it was like running my own little piece of the business as the global fixed income strategist with a wonderful set of colleagues. And I always had a bit of an entrepreneurial streak. My dad was an entrepreneur, great-grandfather was an entrepreneur. I've always been a bit of a outside the norm person. I didn't really quite fit into any base street or academia. Being entrepreneurial was just part of.”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“And they needed help really restructuring that because it had suffered during the financial crisis in 2008 really hurt them. They said, can you help us with that? And I said, well, sure, I can run that pension plan. And so I ended up running that for a couple of years, a few days a week while I was finishing off other projects as well and took them through a transformation with the focus on asset liability management. I had that first taste of managing a pension at Nav Canada. I had no staff. It was very entrepreneurial and I was working with external managers, running searches and really made the full portfolio construction decision and that strategic asset allocation decision. I got really my hands on all aspects of the investment process in that and running a business really of how to staff and how to think through all of the longer term considerations in running that pension plan and doing it well.”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“Got to know Nav Canada that runs the air navigation systems for Canada. I got to know the CEO and the CFO very well and the board and they had a pension plan and it was about a $3 billion pension plan that was fully indexed to inflation because it had been a government plan previously.”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“After James Bond films. But I said to them, Look, this whole area has fallen apart at the seams. There's a lack of transparency. There's a tunnel leverage embedded. There's a bunch of derivatives inside of these things that not many people understand very well. We have that asymmetry of information. I think it's actually going to blow up. So if I were you, I'd be figuring out this space so that you can be the firm that cleans it up. Some people there still think of me as the person who saw the financial crisis coming, but I didn't put my money where my mouth is on that one.”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“A lot of it was around solving some of the complex problems that they didn't yet know they had. So there were areas where, for example, there was a law firm that one of the few in the Canadian market that hadn't really been involved in setting up structured credit. This was in the late 90s, early 2000s. They thought that what they needed was to learn the space so that they could get into it. And a wonderful mentor to me was running the financial services part of that law firm. And she said, can you come and teach us about that whole area? I said, sure. So we came up with a series of webinars, in fact, long before we did this during COVID. She thought to record these sessions and distribute them and keep them around for the team. And I made up a series of, I think it was eight different segments on teaching them about the bond market to start with and then structured credit markets. And we named them, of course.”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“From anybody, I might want to try to do business with. So I leveraged all of that into getting my foot in the door with some interesting clients. My first client was a big mutual fund company that needed to really revamp everything about all of their fixed income product lineup. So my first client was a year-long hefty contract that really established me. And every client I had turned into another deal because they'd hire me for one thing. We'd figure out other things they needed help with and I ended up doing a lot of work through the financial crisis.”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“Long career ahead of me, and I thought, oh, I'm going to want to do more in different things and diversify that skill set. So it's hard. This industry doesn't make it easy to shift asset classes. It doesn't make it easy to shift rules. When you've become a specialist in something pretty early on and reached a pretty high level pretty early on. So in the consulting space, I had this unique background of the deep academic knowledge. I had built a really great network because of moving from one dealer to another dealer to the buy side and through my role as president of women in capital markets at the time I was pretty visible and I had been the fixed income strategist at RBC in the first five years on Bay Street. So people knew me and were willing to refer me and I realized pretty quickly that I had this access to really the whole network that I needed that I was one degree of separation away.”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I made the transition through a few things. I went from the trading floor to the buy side as a fixing come portfolio manager, where my clients were a variety of pension funds and insurance companies. And so I learned about their problems and what they were trying to achieve for the long term while I was on the trading floor working in the fixed income space and in the debt origination space. And then as a portfolio manager for them where my role was mostly doing the technical stuff, the asset liability management, fixed income portfolio management. So I learned a lot about what the clients were trying to do over the long haul through that time. And eventually I made my way into having my own consulting business because I wanted to diversify out of just being a fixed income PM for the rest of my career. It was a great role. I loved it. But I was still young. I was still in my early 30s.”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“I knew that because I didn't love the motivation of being there. On the trading floor it really is about P&L. It's about are you making money today? Did you make money yesterday? How are you making money tomorrow? And who are you making money for? Well, you're not really aiming to make money for the clients other than indirectly that you build a long-term relationship that's good for them and good for the bank. So I didn't love that it was about making a profit for a bank. And I really, really knew that I would be much better motivated by working more directly on behalf of really the beneficiaries of pensions. Had a pretty good idea that that's where I was going to end up.”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“I loved it, and I still love it. I spent the first eight years or so of my career in the trading rooms, two different trading rooms in Toronto, and then from there went to the buy side as a money manager, on to other things from there. But I loved the time on the trading floor knowing that I wasn't going to stay there for my whole career. I loved the dynamics. I love that I know how the capital market sausage is made. I know the inner workings. I know how the swap desk interacts with the rates desk interacts with the currency desk, interacts with the debt origination desk when a corporate deal comes to market, for example. And not many people get that exposure. It's value to me today is huge that I understand those dynamics in a much deeper way than I could have through any other role.”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“Part of it was leaving the aspects of the academic world that I didn't love, and part of it was the lure of going to something that I thought was going to be more engaging for me and in an environment where I thought the things I was interested in would be more of my day-to-day life. Part of it was financial. At the time, the government of Ontario had basically said university professors, sorry, but your pay is being frozen for quite some time. So it was a real combination of things that took me to Bay Street, and I had decisions to make about what area to focus on of going to the street. My background lent itself better to the fixed income side where there's more quantitative analysis involved and lifestyle wise I wasn't crazy about being a deal junkie. Those two main considerations took me into the fixed income world.”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yay, but I don't really know the practical inner workings. So I would just say we're going to talk about currency markets today. Joe, why don't you tell us how it works from your perspective? I learned how to learn from them, and then that fed me for future years.”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“My practical experience was non existent. I had gone straight through school. But I had a lot of experience as a research assistant, which I worked on very practical problems. So that was helpful. And the University of Rochester was a great learning ground from a practical perspective of feeling like I understood something about markets. I had that to hang my hat on. So I very quickly learned to learn from the students. That was what really helped. In the NBA classrooms in particular, where there were more experienced students, I would get a roster of what the students' job experience was and what their areas of interest were. And so I really quickly figured out, oh, there's a currency trader in the room. I'm really keenly interested in that. I know something about the theory of how the currency markets work, and I know something about market microstructure and how volatility moves around the globe in response to infrastructure.”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's a great question, Ted. I do very little, really. I knew some good theory, and I was standing up in front of undergrads and MBA students and mature MBA students who were doing what in those days was a part-time MBA that used to take many years to complete. And I was 26 years old when I first walked into the classroom as their professor. And I was so nervous the first day about what I was wearing and what I looked like. And I walked into the classroom in the old Sydney Smith building on the campus that I had sat in literally the same classroom as a student. My first thoughts were really around how do I establish some credibility because talk about imposter syndrome, I had it.”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“Decided to go down the academic path, so I became an assistant professor at the University of Toronto where I had come out of from my undergrad and master's in the business school. And I spent five years in that role. The research areas that I was interested in were primarily capital markets and international finance and really was keen on the way that the capital markets themselves worked, asset pricing and how markets respond to information was the area of research that I had been in, which wasn't really the forte of the University of Toronto. The University of Rochester where I did my PhD was a Chicago school type of school of thought. It didn't quite fit into the University of Toronto's research program. So I was a bit on my own in my research interests there. I loved teaching and I loved the students. I was pretty good at that. But I really started to watch my students taking their opportunities in the financial markets and I liked what they were getting into. So that eventually lured me.”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“I was 19 coming out of my undergrad and I had some terrific advisors and mentors who pointed out the field of finance to me, which in the early eighties was really still a patient field academically. So that opened my eyes. I tried to take courses in the commerce program as an undergrad and they wouldn't let me. So that's why I made my own master's degree with some finance courses from the business school.”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it was normal ish for a really nerdy person. Am the youngest of four kids, and I was very used to hanging around older people and my sensibilities were oriented to my older siblings. And I was also an independent loner kind of person. So in the grand scheme of university experience for a bit of a geek, it was in the normal range, I would say, because I didn't look young. I didn't behave like I was young. I just behaved like I was a bit of a nerd. So it was okay.”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I ended up finding my way after a little bit of stumbling in some other areas into the quantitative side of economics finance, did a lot of econometrics and statistics, ended up studying economics as an undergrad with that bent in languages, French and Russian, and linguistics and whatnot as my fun courses. And then I went on to do my master's, but I made up my own master's degree as a combination of economics courses that I did the PhD course for micro macro econometrics. I did that coursework because I was thinking about doing a PhD. So I thought I'd see if I liked it. And then I did MBA courses out of the business school. And that was my master's degree. And then went on to my PhD.”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, yeah, unusually, I started university when I was 15 years old. I was able to do that through the help of an amazing guidance counselor in the high school I was at. Spotted me early on as someone with some high potential for a host of reasons and helped me get myself into university early. So starting university young. I was interested in math. I was interested in languages. Started out in those areas. The math courses I took One was a real analysis course that seemed like it was a philosophy course, not a math course. They were the toughest level of math. So I very quickly had to admit to myself I was”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“My guest on today's show is Marlene Puffer, the Chief Investment Officer of Alberta Investment Management Corporation, where she oversees one hundred sixty billion Canadian on behalf of seventeen pensions, endowments, insurance, and government funds in the province of Alberta. AIMCO is one of the Maple Eighth Canadian pension managers that together oversee $2 trillion in assets and are innovators in institutional portfolio management. Our conversation covers Marlene's path to pension management from roots in academia and fixed income, her first CIO role at the Canadian National Corporate Pension Fund, and transition to AIMCO earlier this year. We discuss AMCO's asset liability matching investment strategy, global team, internal and external management, compensation, external manager selection, opportunities and risks, and the unique quality”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source
“Opinions expressed by Ted and podcast guests are solely their own opinions and do not reflect the opinion of capital allocators or their firms. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of capital allocators or podcast guests may maintain positions in securities discussed on this podcast.”
2023-09-11 · Capital Allocators · Marlene Puffer – Canadian Pension Model at AIMCo (EP.337) · IDENTIFIED FROM THE TRANSCRIPT · source