Jeff Wendling joined the Healthcare of Ontario Pension Plan (HOOPP) as a senior portfolio manager in 1998. Leading his teams through challenging market environments, he later became Chief Investment Officer (CIO) and, in 2020, President & Chief Executive Officer (CEO).
In a recent conversation marking his 25-year service milestone with the organization, Jeff reflects on his first months on the job, finding opportunities in tumultuous markets, and how HOOPP is building a foundation for the future.
Q: What first brought you to HOOPP?
A: I was working as a portfolio manager in the investment division of an insurance company when I heard about an opportunity at HOOPP.
I thought pension funds would be a good part of the investment management industry to get into. It’s about being a longer-term investor, rather than being focused on short-term performance and client marketing. Plus, I thought HOOPP was an organization with a lot of potential to become even more successful, and its mission of providing pensions to healthcare workers really appealed to me.
Q: How were your first few years at HOOPP?
A: In those days, HOOPP’s investments and plan administration were two separate organizations, each with its own leadership, but reporting to the same Board. Soon after I started, the Board merged them into a single entity, which led to changes on the investment side. For a brief time, I was the only person working in Canadian equities at HOOPP.
Then a lot of new people started joining HOOPP, adding new and diverse experience and skills to the team. It was exciting. One of those first new hires was a trader and derivatives expert, Jim Keohane (who would later go on to be CIO and then CEO). Jim and I went on to work very closely together for the next 20 years.
Despite all the change, one of the things that held us together was a strong belief in our mission, delivering on the pension promise for Ontario healthcare workers. I think that’s always been fundamental to our DNA and our culture. But what was added, especially with new leadership, was a real focus on performance and, over time, HOOPP became one of the top-performing pension plans in the world.
Q: How did HOOPP’s approach to investing change in those days?
A: It was a turnaround in different areas. We had Jim building up the derivatives strategy and the liability driven investing approach. We had a great real estate team that got us into Europe and the U.S. We were one of the leading Canadian pension plans in diversifying our real estate holdings geographically.
In 2000, I became the head of public equities, and we developed a valuation approach that improved our ability to determine fair value for stocks and stock markets – whether they were over- or under-valued. This proved very helpful in identifying extreme overvaluation in stocks in the early 2000’s during the tech mania and then in identifying extreme undervaluation after the massive stock market decline in 2009.
During the tech mania, which we knew would eventually end badly, the senior investment team worked together to build an option strategy known as a “costless collar.” We used stock options to help protect the Fund from steep losses in case certain stocks went into a nosedive, which is exactly what happened when tech stocks finally came crashing down in 2002.
Q: How was HOOPP able to continue finding opportunities during the next big market event: the Global Financial Crisis in 2008?
A: There are times during a steep market decline when investors become very pessimistic and extrapolate the negative environment far out into the future, but that’s when the greatest opportunities present themselves. That’s one of the main reasons why we’ve performed well over many years, because we are often buying when others are selling.
During the financial crisis, we took large positions in equities at incredible prices. In real estate, we were already investing in industrial properties and we started getting into logistics. With the rise of e-commerce, that has been a big win for us. Today, we’re one of the biggest industrial landlords in the Greater Toronto Area, and we build warehouses around the world.
Q: What were some lessons in leadership you’ve learned from all these experiences?
A: Those first years were a great lesson in the importance of bringing in really talented people and assembling a great team. My approach as a leader follows that: bringing in smart and capable people and giving them what they need while setting the bigger vision. When everyone is on the same page, a team can accomplish so much more than any individual.
Challenging times are inevitable, but they are also temporary. Even in the darkest days, there are opportunities. By being ready for those opportunities, and taking advantage of them, we get stronger. HOOPP has a track record of doing just that.
Q: Speaking of challenging times, you became CEO in April 2020, just as the pandemic was bearing down. What was that like?
A: I got the news in mid-March (of that year) and I felt very honoured, but it was also very strange because about a week later we shut down the office. So, there was no office to go to, no people for me to see, and everything went virtual very quickly. I was getting up to speed on all the divisions, while also working to get my new full-time office set up in my house. Trial by fire.
Also, I was still Chief Investment Officer, and there was extreme volatility in the markets. I put in place a kind of war room, meeting virtually with senior investment management team members on Mondays, Wednesdays, and Fridays to share perspectives from our various investment teams and a wide range of industry participants. It proved we could work together very efficiently and effectively remotely, using technology, and looking at the total fund. We had really good discussions and made some great investments that will continue to bear fruit for years to come.
But markets were only part of the story. There were many fears around COVID and many other distressing things that were going on in the world. We were all feeling the impact in very emotional and personal ways, so it was important for me to be a steadying and supportive influence. We all needed to pay extra attention to our mental health, so I tried to set a positive example. I was out every day enjoying walks with our dog, Guinness, as a way to clear my mind.
Q: Earlier, you mentioned the “HOOPP DNA.” Tell us more about that.
A: Being focused on our members is fundamental to our DNA and our culture. It’s a powerful way to bring us – and keep us – together. Working together as a team, we’re also high-performing and very collaborative. We have each other's backs and help each other come to better decisions and results.
Our focus on equity, diversity and inclusion (EDI) is another big part of that. We believe that having a diverse employee base with a wide range of thoughts and experiences to draw from, makes us a stronger organization. It also helps us better serve our diverse membership. In 2021 we launched our 5-year EDI strategy, and it is helping us make great progress on this front. For example, we’ve broadened our recruitment practices and introduced new benefits to better support our employees’ diverse needs. Our employees also have a key role to play; HOOPP’s dynamic employee resource groups (ERGs) are using events and education to help us celebrate our differences and better understand the challenges that equity-seeking groups face. We are happy with the progress we’ve made so far and EDI will continue to be an area of focus for us going forward.
Q: What challenges do you see ahead for HOOPP, and how will we get ready to face them?
A: We’ve had a very strong period of returns for the last 15+ years, so one of the challenges is determining how to keep generating the returns that we need.
How will we deal with that? We will keep innovating and evolving our strategies. We’re thinking more globally, even as Canada remains a focus of our investing, which is going to help us find more opportunities. We’re also building a lot of capabilities in areas like technology, risk, and with our climate change strategy. All of this will serve us well and make this Plan more resilient to protect against risks and generate returns.
Any final thoughts?
I’m very optimistic about HOOPP’s future. There will be challenges, but we have a strong sense of purpose and culture. With our success over many years, we’ve been building something incredibly special here. I’m confident that we have the right kind of organization, with the skills, commitment and resilience needed to help drive HOOPP forward through whatever we face in the years ahead.