One of the architects of the Canada Pension Plan's investing strategy is aiming to replicate his success — for Qatar – Financial Post

Don Raymond, one of the architects of the investment strategy behind the Canada Pension Plan, has been recruited to build similar investment capabilities at the Qatar Investment Authority, a sovereign wealth fund with an estimated US$328 billion in assets whose holdings have included stakes in London’s Heathrow airport and New York’s Plaza Hotel.

Raymond told the Financial Post he was approached by a recruiting firm in London and found the opportunity too hard to pass up.

“They knew of my experience in helping formulate the overall investment strategy at CPPIB and my final role as head of total portfolio management and chief investment strategist,” he said. “To be able to do it again at a national level was very appealing.”

The QIA fund, which was established in 2005 with a mandate to invest and manage Qatar’s reserves and help develop a competitive and diversified economy, has expanded its holdings in recent years in the United States, United Kingdom and Asia, with a growing portfolio of assets in sectors including real estate, financial services and technology.

Raymond spent over 12 years at CPPIB during a crucial time in the pension management organization’s development as it shifted from largely passive investments to active management, developing in-house investment expertise along the way. He was the first employee in the Canadian pension’s public market investments department, overseeing a portfolio of $11 billion in passively managed funds as it grew to $100 billion managed by more than 130 employees using five distinct investment strategies.

In his final role as chief investment strategist, Raymond chaired CPPIB’s investment planning committee and was responsible for overseeing portfolio design and management for the fast-growing capital pool. He also helped develop the United Nations’ Principles of Responsible Investing, which were adopted by the Canadian pension in 2005.

Raymond left CPPIB in 2014. Since then, he had been working at Alignvest Management Corp., an alternative investment management firm with clients including pension plans, foundations and ultra-high net worth family offices.

“I ultimately decided that I had one more major operating role in me at an ‘asset owner’,” the 58-year-old told the Post, adding that he will be leading the overall investment strategy at QIA.

He said he found the vision of the sovereign wealth fund’s chief executive Mansoor bin Ebrahim Al Mahmoud — reportedly a seasoned dealmaker who aspired to steer the fund towards more active investing — to be “bold” and compelling.

“I was offered a high-impact role,” Raymond explained.

“QIA was looking to build capabilities similar to what I had helped build at CPPIB, which was attractive both for them and for me.”

In an interview this month with Bloomberg TV in Davos, Switzerland, during the World Economic Forum, Al Mahmoud said the sovereign wealth fund will be shifting towards greener assets, with no additional investments in coal and no significant expansion of its oil and gas holdings.

“Since most of the country’s income comes from hydrocarbons, we’re not looking to add to that exposure,” Raymond told the Post.

The sovereign wealth fund’s CEO has also said publicly that QIA is looking to increase investments in the United States, with Reuters reporting in July that the target is to hit US$45 billion over the next two years, up from around US$30 billion.

QIA is the ninth-largest sovereign wealth fund in the world by total assets, which stand at US$328 billion, according to the Sovereign Wealth Fund Institute.

Raymond, who moved from Toronto to Qatar’s capital city Doha in the new year, said the location of the new job appealed to his “adventurous streak,” though, as tensions between the United States and Iran escalated this month, he added that he “could have picked a better time to relocate to the Middle East from a regional security perspective.”

His first job out of university in the 1980s was also far from home — in a desert in northwest China — before he returned to Canada for graduate school, earned a PhD, and turned his focus to finance at Burns Fry Ltd. and Goldman Sachs.

“I was a wireline/oilfield engineer and helped open up a new (oilfield services provider) Schlumberger base in the Gobi Desert, not too far from the Kazakhstan border,” recalled Raymond, who also trained as a pilot during a two-year stint in the Canadian military after high school.

He said he doesn’t know how long he’ll spend at Qatar’s sovereign wealth fund, but expects it will take several years to build out a team, embed new processes, and execute on that strategy. And while he hopes to have “an enduring impact” on the Qatari institution, he acknowledged that much will depend on the progress he makes.

“Job security is entirely dependent on performance, just like at Alignvest and CPPIB, as one would expect from a world-class investment organization,” he said.

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