Next challenge: Face to Face with Mark J.P. Anson

If pension fund investing has its Sir Edmund Hillary, it would be Mark J.P. Anson. In his professional career Mr. Anson reached two of the highest summits among Himalaya-class pension funds — chief investment officer of the California Public Employees’ Retirement System, Sacramento, and chief executive of the British Telecom Pension Scheme, London, the largest fund in the U.K. Last year, he left British Telecom and its Hermes Pension Management Ltd. unit, where he was also CEO, to take on a new challenge at Nuveen Investments Inc., based in Chicago. Mr. Anson, a high achiever who has written four books and more than 80 research articles, sees keen opportunity to position Nuveen, known largely for retail clientele, as a major institutional investment firm. Besides Nuveen Asset Management, his oversight extends to Nuveen’s collection of investment subsidiaries: NWQ Investment Management Co., Tradewinds Global Investors LLC, Symphony Asset Management LLC, Rittenhouse Asset Management Inc., Santa Barbara Asset Management LLC, and Hyde Park Investment Strategies, as well as Richards & Tierney Inc., an investment consulting firm.

We coordinate across several different operating companies. What we do is we bring focused asset managers, specialized asset managers under one umbrella, where we can leverage off a central platform of resources: compliance, accounting, human resources, marketing. The key is to allow our affiliates to have their independence, so they can do what they are supposed to do, which is darn good portfolio management.

Nuveen first contacted me approximately four and half years ago when I was at CalPERS. In fact at that point I came out to Chicago to meet with Tim Schwertfeger (then chairman and chief executive officer) and John Amboian (then president, who is now CEO). At the end of the day I concluded I wasn’t ready to leave CalPERS. There were still things I needed to finish at CalPERS. Fast-forward from there to two years ago. I had the opportunity to go from managing the largest pension fund in the United States to managing the largest pension fund in the United Kingdom, the British Telecom pension scheme. As I left the country, I had a brief conversation with them (Messrs. Schwertfeger and Amboian) and again there was good will on both sides of the table and still interest on both sides. But I had the opportunity to move overseas and apply my skill set on an international basis. So two years from there — we’re now to the spring of ’07 — and once again I get contacted by Nuveen. Now three times (is) the charm. I liked the fact Nuveen was being taken private by Madison Dearborn Partners, LLC. One of the issues I had (originally) is that it was a publicly traded company. It was still beholden to the short-term earnings expectations of analysts on Wall Street, even though the clientele (was) geared toward long-term goal-setting. There is a disconnection there. With the private equity transaction, those two things have been brought into alignment.

There are a range of duties. One thing I’m actively involved in is the Nuveen fund board. At Nuveen we have two boards of directors. One is the corporate board for Nuveen the corporate entity and the other important board we have is the mutual fund and closed-end fund board that oversees all of our investment products.

The second key part is to determine where and how we will build growth within Nuveen. That growth can come from three sources: How do we expand our distribution for our existing products? How do we build new products within Nuveen that we can distribute within the next two or three years? Where do we have gaps in the Nuveen product lineup that we might fill with liftouts or acquisitions?

The institutional sales group (is) one I will be intimately involved building up. We have to get the word out about Nuveen, about its institutional products and capabilities. We have to develop ourselves as thought-leaders just as we did at CalPERS and Hermes. We have a lot of that already within Nuveen.

I’m keenly interested in alternatives. We have a great alternatives shop in Symphony Asset Management in San Francisco. (There’s) not a lot I can add there because they are already doing it. So when I step back and look where else can we grow in alternatives, it’s where we might see other products across the other affiliates to develop additional alternative capabilities. We have a budget for $155 million to allocate for seed capital. To date we have about $120 million outstanding. We are putting our lunch money out there first to demonstrate the value of these products before we will introduce them to the public.

Well, incentives can be cash incentives. One of the great deal points we had with Madison Dearborn is that a slice of the equity flowed down and was divided broadly and deeply throughout Nuveen and across the affiliates. So sweat equity is also real equity. We have a great benefit package. One thing we maintained through the Madison Dearborn deal is the tuition reimbursement for our employees. When they send their kids to college, Nuveen will pay the tuition. It is a program we were adamant would remain at Nuveen as we went private with Madison Dearborn. That was a deal breaker. And this goes all the way from the top — from Mark Anson all the way to his secretary.

One thing that gets overlooked in regard to private equity is it is almost a perfect example of good corporate governance at work. And my personal opinion is private equity firms have done a very poor job at telling their story, which is why there has been quite a bit of bad press. Private equity firms work directly with the management of companies to ensure an effective business plan to maximize the value of the companies for the shareholders.

There will always be a need for the public markets, because that is where the pool of capital is the largest, deepest and most liquid. For instance, a company that is well run with good price-earnings ratio and sound dividend policy and good corporate governance — there is no reason for them to be taken private. And they already are fairly priced. But they’ll still need to go to the public markets to raise capital for their operations.

Don’t move to London. The sticker shock is terrible. My favorite Starbucks I usually stop at for my tall decaf latte every morning cost me about £3, which when you translate that into dollars is more than six bucks. So the declining dollar I think is good and bad. It makes the demand for American goods all the more enviable; that should be good for domestic profits and make U.S. products a bit more competitive. It will slow down our imports and make us consume domestically a bit more. That might add a little extra boost to the economy.

These last few months I’ve been exhausted, moving the family from London back to the United States, getting them settled … I’m working on a new book; I just published two new articles. Basically I do my writing very late at night or very early in the morning, at airports, hotels, airplanes, all the trips back and forth to the coast. I’m always on my laptop. … The flip side of that, my golf game goes down. I don’t get to the gym as much as I’d like to. I haven’t read a book for sheer pleasure in about a month’s time. My kids are 11 and 13; they tend to sleep in when you let them. So I can get up around 6:30 and can work until they get up. That’s a lot of good writing time.