After graduating from the Master of Financial Risk Management program in 2017, Agnes Chang began her career in Canada with Ontario Teachers’ Pension Plan in the role of Investment Associate, within the Capital Markets (CM) group. Two and half years later, Agnes became a recipient of the annual Ontario Teachers’ Pension Plan CEO award – an honour given to employees who have demonstrated excellence within the organization. In this post we will find out a bit more about Agnes and discover what made her performance in 2019 so worthy of this accolade.

First Things First: What does Ontario Teachers’ Pension Plan do?

Ontario Teachers’ is Canada’s largest single-profession pension plan with $201.4 billion in net assets (at June 30, 2019), servicing members, paying pensions and investing assets on behalf of 327,000 working and retired teachers in Ontario. Ontario Teachers’ invests member contributions to ensure there is enough money in the fund to support teachers when they retire. Established in 1990, Ontario Teachers’ is one of the world’s largest institutional investors with an international reputation for innovation and strong performance. 

“I work in the Capital Markets group, which is an investment arm for Ontario Teachers’ to manage beta exposures, provide centralized execution and to run diversified absolute return strategies,” said Agnes.

“For the first year I worked in the Alternative Investments team, i.e. hedge funds team, and one and a half year ago I moved to the Insurance-Linked Securities (ILS) team. I enjoy working in both teams and it’s really nice that Capital Markets provides the opportunity and encourages people to move around as they learn different markets and develop expertise at different stages of one’s career.”

There are a number of different teams within the Capital Markets group at Ontario Teachers’, such as Equity Products, Global Credit, Fixed Income, Commodities, and Trading to name a few. Agnes and her manager form the ILS team and look after assets whose values are driven by the underlying insurance and reinsurance premiums, and loss events.

Getting to know a new market: Insurance-Linked Securities

So what does Agnes and the ILS team do?

“ILS sounds niche, but our team at Ontario Teachers’ has a wide and flexible mandate to take advantage of opportunities in different markets, products and risks.  We invest directly in the ILS markets such as catastrophe bonds and industry loss warranties, and we also invest in other products (for example collateralized reinsurance) with external ILS managers and reinsurance partners.”

“We can look at products associated with natural catastrophe perils, life, weather and specialty risks. Natural catastrophe means events like hurricanes, earthquakes, or wildfires. Life includes mortality, health, longevity, persistency and so on. Specialty covers the risks outside of life and catastrophe, for example auto liability and workers’ compensation.”

“The beauty of working in a two-person team is the incredibly broad exposure in all activities. In the ILS team, the learning curve is very steep – I have been building my understanding of the insurance/ reinsurance/ ILS markets, learning to trade catastrophe bonds, and supporting my manager in decisions on portfolio construction, manager allocations and private transactions. I can see every deal we do and pass - in fact my manager encourages me to voice my view and ask questions, so we effectively make decisions together after discussions.”

“There are also challenges and opportunities in a two-person team. My main goal originally for 2019 was to build up a diversified catastrophe bond portfolio with optimized risk-adjusted returns. Then my role expanded as I stepped up and took more responsibilities when my manager took a temporary leave for seven months in the year.”

…and the award goes to…

Agnes certainly rose to the challenge - fast forward to December 2019 when Agnes is receiving the award. So what did Agnes think at the end of the seven month period when her manager returned to the office?

“I really appreciate my manager and CM’s trust and confidence in me. It turned out to be a fantastic opportunity to learn and develop from all perspectives." 

"First and foremost, trading catastrophe bonds definitely helped me to improve my sense of the market and decision-making capabilities especially in a fast-moving market with incomplete information and changing market sentiment. I think that’s one of the most important skillsets that I developed during the year." 

"I’m grateful for the autonomy in the portfolio within a defined set of limits, which speaks to Ontario Teachers’ great trust in junior talent and its philosophy in ‘learning by doing’.”

“Ontario Teachers’ culture of partnership and collaboration is extremely helpful. I never felt alone when facing challenges and issues. Managers and colleagues in CM and other departments such as Total Fund, Equities, Risk, Finance and Operations have been very supportive and gave me a ton of advice and assistance. The interactions with internal stakeholders and external managers/ reinsurance partners have been super useful.”

“I also enjoy reviewing some private opportunities, co-investments, performing due diligence on ILS managers and monitor our existing holdings. These tend to be more complex and structured, helping to deepen and broaden my knowledge, and sometimes seek relative value across different markets. My plan is to keep building on that and to improve my risk-taking capability on an overall basis.”

How the MFRM program prepared Agnes in her career

There were a few aspects of the MFRM program that helped Agnes to this point of her career.

Those include the development of industry-specific knowledge, the opportunity to connect effectively with professionals, along with presentation and team working skills developed during the team assignments.

“The curriculum itself is very well structured and thoughtfully laid out. Some courses were really useful in helping to understand the nuances and the differences in the financial industry and regulations in Canada. There were courses that covered topics such as how insurance works and what role pension plans play in the economy. We looked at how their balance sheets are shaped differently to that of other financial institutions, such as banks, and how the buy-side companies behave differently from those on the sell- side. Other courses introduced factor investing, financial derivatives strategies, advanced corporate/ structured credit products and fixed-income markets, and the risk management of these activities.”

Providing the link to industry

Agnes felt Rotman did a great job in connecting its students with current risk management practitioners. A good example of this is the Risk Management Project.

“The project is quite unique to the MFRM program. It’s helpful for students to understand what the industry is thinking about, and to provide useful solutions for the industry. The Risk Projects and speaker series also allow the students to build their network with the people in the industry, which may be very helpful for their long-term career development.”

Networking events played a role in Agnes landing a job at Ontario Teachers’. “At one of the events I met someone from the Alternative Investments team at Ontario Teachers’, and that eventually led to a job opportunity after completing the program.”

Networking is crucial

With these events, Rotman provided lots of opportunity to get a toe in the industry, to build a network, and to understand what to talk about and how to behave professionally.

“Culture is a big part of it too. You might have to network in a different way if you are in Canada, China, the US, or the UK. It’s important to know the good ways to build your network, to get to know people, and for them to get to know you as a person, not just as a ‘working machine’.”

“I did my undergrad in China, and my first masters at the University of Chicago. Before moving to Canada in the Fall of 2016, I worked for four years in Beijing specializing in global external manager investment. Those experiences have been very helpful from various perspectives. I find Rotman supports students to develop holistically in academic knowledge, market understanding, technical skills, alongside soft skills like public speaking and teamwork. They also help students in networking, job search and mock interviews which ultimately lead to good jobs and hopefully successful careers in the long run.”

Working with others

The MFRM program places an emphasis on working in teams wherever possible during the program. Students work in pairs during the Risk Management Project, and courses regularly consist of group assignments or activities.

At Ontario Teachers’, Agnes has benefited from close working relationships with colleagues in her immediate and wider teams as mentioned earlier.

“When I was contemplating the catastrophe bond portfolio I benefited from advices from the quant experts in the Quantitative Strategies & Research team and Total Fund Management team on the quantitative portfolio construction framework. While appreciating autonomy, I find the collaborative environment at Ontario Teachers’ facilitates efficiency and help avoid re-inventing the wheel. There are also many projects that require working with different internal and external stakeholders. I wouldn’t have been able to achieve anything in the seven months without the help, guidance and support from other professionals in this organization. So I think it’s great that MFRM fosters teamwork among students which prepares us for working in larger organizations.”

Congratulations to Agnes on winning the CEO award at Ontario Teachers’!

The Master of Financial Risk Management is a full time program designed to prepare ambitious young professionals for careers in risk management and finance.