Doug Pearce has run the British Columbia Investment Management Corp since 1988... that’s 25 years in charge. Under his tenure, the BCIMC’s assets have grown from $15 billion to $100 billion. In my view, he’s a pillar of the North American institutional investment community. But that will soon change, as Doug just announced his retirement.
I have to say, Doug will be missed. He was a champion of “long-term investing” and kept his fund rooted squarely in the “real economy”. As someone who spends all his time trying to achieve the same ends (i.e., rerooting finance in the real economy), I always appreciated Doug’s work and his organization.
Anyway, before we let Doug out the door, I do hope he’ll share some lessons and realizations from his long career. As a start, here are few of the insights I’ve gleaned from the news articles over the past few days:
- Add Real Value: “We deploy capital with people who will invest productively. Long-term horizons help us avoid all that speedy trading, which ultimately isn’t important. The amount of investment we make in Canadian real estate development, for example, creates a whole host of jobs as well as proving a good return on investment for us. Pension fund investments provide a lot of benefits to the Canadian economy.”
- Focus On The Long-Term: BCIMC had a ”...conservative approach to asset allocation and maintained a long-only, long-term view... Hedge funds never fit into our philosophy. We never believed in short-term trading and we don’t take on a lot of leverage.”
- Be Humble:“One thing markets taught me is humility. The riskiest time in the market is when everyone thinks there is no risk at all.”
- Don’t Forget The Big Picture: “We’ve gone from a domestic mindset to a very globally interconnected capital market with a lot of leverage intertwined in it, which makes it more complex. It’s not just the volatility, but also the risks that are now in the market. Everything is interconnected, which makes (investing) much tougher. Now, with the big decline in interest rates ending, going forward, what will be the new tailwinds and headwinds? There’s also the change in demographics, with the world’s population expected to reach 12 billion by 2050. What will that mean for food and health care, other investments? What will be the new tailwinds and headwinds?”
So long, Doug. Thanks for your 25 years of dedication and service!
