Innovating for Better Outcomes: A Tribute to Mike Jensen

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Eric Lambert and Noel Mills pay tribute to Mike Jensen, a true titan of the LGPS industry who passed away suddenly this summer. They reflect on his fearless, disruptive approach to investment and the remarkable transformation he drove at Lancashire County Pension Fund.

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As many of you may already know, one of the titans of the LGPS industry, Mike Jensen, passed away suddenly in the summer. While Mike was in many ways quite a reserved person – never one to court the limelight or seek industry or peer recognition – former colleagues think it entirely appropriate to recognise his beneficial impact on both the industry he served and on their own individual knowledge, skills and careers.

Mike had a passion and skill for good investment, the equal of anyone in our industry, and was never afraid to challenge perceived “norms”. In equity stock-market terms he might well have been classified as a “disrupter”.

Mike’s LGPS career cannot be adequately summarised by the titles held such as Treasurer, Fund CIO, CO-CIO (pool) etc. He preferred actual outcomes to titles and words; practical investment solutions rather than neat theoretical ideologies, although he was fully conversant with these.

In empathy with Mike’s focus on “outcomes” we would like to describe events at – and his impact on – Lancashire County Pension Fund (LCPF), while recognising he had previously spent many fruitful years at Cornwall Pension Fund.

In 2009 (post the Global Financial Crisis) LCPF recruited Mike, while at the same time hiring two experienced Independent Investment Advisers (IIAs): Noel Mills and Eric Lambert. What followed was a major and radical overhaul of LCPF – not least in terms of investment strategy and implementation – all supported by more appropriate advisory and governance arrangements.

The immediate disintermediation of traditional consultancy was replaced by a professional Investment Panel which at the outset included well-known LGPS luminaries such as George Graham, Mike himself, Trevor Castledine and Abigail Leech, as well as the two aforementioned IIAs.

Increasing professionalism of the investment function was always a strong Mike theme and goal.

During 2010, Mike drove the LCPF investment strategy fundamental rethink. Mike never accepted either the status quo and/or industry norms, he continually looked beyond accepted practice to find a better path. Unusually, point strategy benchmarks were rejected in favour of asset class ranges to facilitate and encourage more flexible “good investment”.

The ranges chosen were purely investment-led, not suffocated by spuriously accurate pre-determined consultant asset modelling. While regularly reviewed leading to minor adjustments, this strategy remained in place for at least the following decade, surely proof of good initial fundamental review.

To evidence Mike’s innovation the evolved strategy included several investment themes which became popular in subsequent years: considerably lower public equity exposure, though with a greater private equity component; increased exposure to strong income-generating assets especially real estate and infrastructure; significant private markets exposure especially in fixed income; local investment; housing; social investment and renewables.

The implementation of this was effectively completed over several subsequent years and delivered outstanding fund returns, with relatively low volatility, to the fund for many years. Another “early-adopter” theme was the fund making significant direct investment across all these assets: made possible through the Lancashire Pension Fund Committee’s respect of – and confidence in – Mike, which allowed proper and appropriate levels of delegation.

Mike, in another strand of increasing professionalism, always recognised the benefits of scale, not just in pure investment terms but also in enabling the best possible professional capabilities and resilience. He was a major proponent of LCPF’s collaboration with London Pension Fund Authority before pooling had become “a thing”! This advanced collaboration subsequently morphed organically into the highly successful LPPI pool.

We have little doubt Mike would have pushed LCPF to have gone even further down the radical road but he agreed “consensus” when faced with reticence by the LCPF investment panel. Mike did not have to get his own way all the time! Importantly, every single decision was taken from the standpoint of a better LCPF with decisions taken at the right level by the right people with the right input: surely what good governance is all about.

Mike persuaded rather than cajoled when pushing boundaries to their limits. Everyone who worked with Mike knew they had been severely challenged by a knowledgeable and skilled investor, but they would forever be a better informed and a stronger investor.

Irrespective of any (and all) the other notable things Mike achieved in his LGPS career, the beneficial radical transformation of LCPF from a very ordinary “run-of the mill” fund to an exceptional and extraordinary LGPS-leading and multiple award-winning fund stands prominent. This is a most fitting tribute to Mike’s innovative investment skills, and he was rightly proud of that achievement.

In more recent years Mike returned from the pension fund to treasury where he continued to benefit Lancashire Local Authority with his investment skills. Mike retired to Perth several years ago where, despite good health largely eluding him, he was very happy.

Mike was a significant presence in the LGPS for many years, and the industry is poorer from his retirement and subsequent passing.

He earned respect wherever he was. Our deepest and most heartfelt sympathies and condolences are extended to his wife Caroline, his children and grandchild.

The final curtain has been drawn on a fabulous LGPS career. In Shakespearean vernacular “we’ll never see his like again.”

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