Interview – David Stewart
INTERVIEW: DAVID STEWART
“It is always wrong to bet against human ingenuity and ambition.”
David Stewart, chief investment officer at British Airways Pensions, talks to Mona Dohle about taking the reins weeks before the lockdown, being hard-wired for optimism and why now is not the time for tactical calls.
You became chief investment officer (CIO) at British Airways Pensions a month before the lockdown, so how have the first six months in the job been for you? It’s been interesting. I joined in mid-Feb- ruary and by the end of the month we were doing the first trial runs of working from home because it became obvious that we were about to enter that scenario. I officially became CIO at the start of March and almost my first action was to send everybody home – at least I had the chance to be in the same office with them for a few weeks. It occurred to me recently that if you shorted the market every time I moved jobs you would have quite a good perfor- mance record by now. I joined the Abu Dhabi Investment Authority just before
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the Asian debt crisis, launched my first fund weeks before 9/11 and now this. My job moves tend to be a performance indi- cator of some sort.
How have you settled in with the team dur- ing the lockdown? Reasonably well. Our deputy CIO, John St. Hill, joined from Nest during the lock- down and has not had a working day in the office yet. Thanks to video conferenc- ing we know what he looks like, but we don’t know if he is five-foot-two or six- foot-two. We’ll find out in a more normal environment, I guess.
Could you tell me about British Airways’ two pension schemes? The Airways Pension Scheme (APS) is
the older of the two. It had a £7.9bn port- folio in March 2019, is pretty mature and around 99% funded. Its interest and inflation hedges are in the high 90s as well. As you would expect, it’s mainly gilts and credit with private equity and real assets pretty much in run-off. The New Airways Pension Scheme (NAPS) is less mature, it is about £18.1bn, 85% funded (March 2019) and the hedge ratios are much lower. The scheme has a more conventional asset allocation of about a third equities, 8% property and 4% alternatives.
NAPS closed to new members in 2018 and you have since reduced your equity exposure.
The NAPS scheme is working to a long-
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