Dear Trustees and Industry Colleagues:

I hope you enjoyed our recent Future Investment Policies Decisions meeting. As part of the reception to mark my retirement, I had prepared some comments, including an important “Thank you” to all of you. However, we did not want to interrupt your opportunity to speak with Stephen Poloz while he was signing books, so instead I am sharing my comments with you here.

A lot has gone through my mind in the last several months as my retirement date, let’s actually call it my semi-retirement date, approached. The most important thoughts have been about gratitude, collaboration and celebration. 

Thank You

I am so very grateful for the career that I have had. When I was first hired at the Wyatt company, I started doing pension administration and actuarial valuations on handwritten “spreadsheets”. I learned a great deal, and in working with plan Trustees who were committed to looking after their members in retirement, the importance of pensions to people who chose to retire or who could no longer work became very apparent. I continued to develop the knowledge to make those pensions secure. I feel so fortunate that I have been able to spend all these years helping to deliver safe pensions to so many people and I want to sincerely thank Trustees for this opportunity and for the trust that you have placed in me. I am also thankful for having been able to work with so many dedicated administrators, investment managers, lawyers and accountants, and of course my very talented colleagues at George & Bell. I want to say a special thanks to Kristen Goertz for always being there, especially during some challenging times. 

I want to recognize Bruce Rollick as the most influential person in my career. While a major focus of our work is now investments, Bruce was a driver behind many aspects of plan design. A great deal of work done in the early years to de-risk plans such as adding a consent requirement for early retirement to mitigate issues that arose from solvency funding requirements and providing that all benefit improvements are ad hoc and not automatic. The current plan design of having a basic benefit that is updated by a decision of the plan Trustees and of retiree increases linked to a CPI formula that is subject to approval by the plan Trustees goes back to the 80’s and 90’s and has stood the test of time.

Future Investment Policy Decisions meetings

Bruce was very intelligent, thoughtful and creative. He could also be a very domineering personality in a room. Those who didn’t know Bruce very well might have thought of him as a one man show and to replace Bruce would mean doing everything and being the sole voice in the room. But Bruce stressed the importance of making sure that we had the smartest people at the table to constantly look at ways to make our clients’ plans better. He taught me the importance of collaboration and our annual Future Investment Policy Decisions meeting was born out of the importance we have placed on collaboration. About 20 years ago we started to have a meeting with just managers to talk about changing investment policy and asset mix. We reported back to Trustees and some expressed interest in attending so we opened up the meeting and formalized it to this once-a year event to share views and ideas. 

Investment Initiatives

Our plans have directly collaborated on a number of initiatives which have delivered outstanding results for your members and I’m proud that we have driven this collaboration. This includes:

  • creating a real estate company that has grown from $30 million to over $5 billion, 
  • starting a private equity investment program that not only avoided the normally-accepted negative return in the first year but achieved a 35% rate of return in year 1, 
  • initiating custom infrastructure investment funds to meet the specific needs of your plans and investment policies, 
  • creating a new real estate investment fund, 
  • implementing unique direct lending portfolios, and 
  • collectively negotiating contractual terms and fee discounts,

to name just a few things. Some of the successes I will always remember, include, a unique way to raise new capital to fund real estate development, the aforementioned private equity program which exceeded all expectations, the levered bond solution which prevented benefit reductions for at least three pension plans, the new alpha sources which have provided diversification and significant additional returns, and the Trustee initiated lobbying effort which resulted in a critical fix to the Target Benefit Plan PfAD rules. Thank you to Trustees for making us better at what we do and to the many dedicated professionals we have had the pleasure to work with, including, investment managers we collaborated with to develop solutions that did not exist. I am proud of the long-term relationships we have built with other professionals who have worked hard to provide very important and valuable input as part of the team. 

I am also very happy with our succession planning. After finding myself having to manage SISS on my own in 2008, I had John Gilfoyle join me and John and I then partnered with Brendan George and Jeremy Bell. In meeting with Brendan and Jeremy it was immediately clear that we were fully aligned in putting clients first. The partnership was seamless. You may only have contact with a few advisors from George & Bell however our team includes 12 actuaries and 6 CFA’s. Our team has been behind the creation and implementation of the investment changes you’ve made in the last 15 years which represent 50% of the plan assets. We have a large number of advisors who have knowledge of the investments in your plans. For example, there are between 20 and 40 George & Bell clients invested with each of ACM, Concert, Fengate and Northleaf, meaning it’s not just the George & Bell advisors you see who are monitoring and analyzing these investments – there are other George & Bell consultants and other Boards of Trustees. Behind the George & Bell advisors that you see is a great team and a solid succession plan today and going forward.

A Time for Reflection and Celebration

Finally, I want to touch on celebration. We tend to be focussed on what we need to do next to fix the problem or make things better. One Trustee recently reminded us to pause, reflect on some of the challenging times that we have faced and celebrate the great financial position the plan is in today. About 14 years ago I was hired by Trustees whose actuary had advised that their plan was about 30% to 35% unfunded, meaning that a benefit cut was required. Before he joined George & Bell, I connected with Greg Heise to be the new actuary for the plan, and with an investment manager that most of you know, to work with me to fix the plan’s funding issue. It took some years, but not only did we avoid a benefit cut, the plan has provided benefit improvements. What is truly remarkable is that this plan did not have a lot to work with because it was so small and I am sure that some managers, actuaries and consultants would have found a business reason to walk away. This plan and many of our other clients are now in the best funded position in history, well in excess of 100% and I would like to celebrate this as part of my semi-retirement. I am proud of where we are today, with what we have accomplished and with how your plans are positioned going forward. 

Finally, I want to thank my wife Deb and our son Branden for being so supportive over the years and allowing me to spend so much time on what I have seen at times to be a great adventure. 

I’m looking forward to the future and the new adventures ahead. 

David Lee

Comments 3

  1. Congratulations David! I am pleased to see your retirement is qualified as “semi”, as I firmly believe that retirement is an opportunity to find some new directions! I very much enjoyed the recap of your career, and I particularly remember those early days in the ’80s that we shared at The Wyatt Company under the management and singular leadership of Bruce Rollick. I appreciate your recognition of Bruce, I always felt he was a man with a huge heart underneath that “domineering personality in a room”.

  2. David. Congratulations on this “semi-retirement” milestone. You have been an exceptional partner to Concert Properties. I will miss our long calls at all hours of the night and weekends trying to problem solve the challenges that have come our way from time to time over the past many years. Working with you and the amazing G&B team, we have always brainstormed the right solution that somehow always resolves the challenge – and makes it a win win! I also want to thank you for our friendship – it has been my privilege to have known and learned from you. Enjoy this next stage of your journey and spending more time in golf and photography! All the best from your friends at Concert Properties!

  3. Congratulations on this momentous occasion, David! We simply could not be happier for you to begin this new chapter, and fill it with all of the best things in life. You will no doubt find the time to pursue your passions and make lasting memories with your family.

    We will be forever grateful for the trust you had in us as an emerging firm, and for all of the invaluable feedback you provided along the way. Under your guidance and with your support we continued to improve our business in ways we still see the benefit of today. Your professionalism is unparalleled, and your character is unwavering.

    Wishing you all the best in your semi-retired years!

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