Carsten Stendevad (DK)
Prestation: Modernizing welfare using the third sector
Carsten Stendevad is CEO of ATP, one of Europe’s largest pension plans with 4.9 million members. Carsten became CEO in April 2013 and is responsible for all pension, investment and administrative activities within ATP.
Prior to joining ATP, Carsten was a Managing Director in Citigroup’s investment banking division in New York, with global responsibility for Citigroup’s corporate finance advisory team. In his 12 years at Citigroup, Carsten advised leading corporate and institutional clients around the world on a broad range of M&A, financing, risk management and investment decisions. Throughout his time at Citi, Carsten maintained a strong focus on emerging markets, including two years where he was based in Mumbai, India. Prior to joining Citi, Carsten worked for McKinsey & Co in New York and Copenhagen. He started his career as a research analyst in the Statistical Research Department at the Central Bank of Denmark.
Carsten Stendevad was born in Denmark, and grew up in Belgium where he graduated high school from the European School in Brussels. He holds a B.Sc. and M.Sc. in Economics from the University of Copenhagen (cand.polit.), a postgraduate diploma in Rhetoric from the University of Copenhagen as well as a Master of Public Policy (MPP) from the Kennedy School of Government at Harvard University.
Carsten is married with two children.
2013 – Chief Executive Officer (CEO), ATP Group
2007 – 2013 Managing Director and Global Head of Financial Strategy Group, New York
2004 – 2007 Head of Emerging Markets Financial Strategy Group, New York
2002 – 2004 Head of Corporate advisory, Mumbai, India
McKinsey & Company
1997 – 2002 Project Manager, McKinsey & Company, Copenhagen and New York
ATP is a mandatory pension scheme for Danish workers and a supplement to the Danish tax-financed old-age state pension. ATP currently has 4.9 million members of which 960.000 are pensioners. For 50% of Danish pen-sioners, ATP Pension is their only source of pension income other than their old-age state pension.
ATP is one of Europe’s largest pension plans with net assets of EUR 92bn. The average yearly return has been 10.5% over the last ten years. ATP’s investment strategy is fundamentally built around the objective of producing stable future pension cash flow streams. All ATP’s liabilities are fully hedged against interest rate risk, and ATP currently has a funded status of 117%.
ATP has divided its portfolio into a hedging portfolio (composed of long dated fixed income instruments and real assets) and a return-seeking portfolio (composed of a highly diversified risk parity portfolio). 85% of assets are managed internally (mainly in fixed income, listed equities, real estate and special situation direct investments) with external mandates mainly in the areas of private equity, specialised credit funds and infrastructure. For all external mandates, ATP seeks to actively leverage ideas, skills and processes as well as access to co-investment opportunities.
ATP is among the most cost-effective pension plans in the world. In 2014, administration expenses for ATP Pen-sion were EUR 8.30 per member (equivalent to 0.05% of ATP’s average assets). Total direct and indirect invest-ment costs (including operating costs, external management fees and transaction costs) amounted to EUR 35 per member (equivalent to 0.18% of average assets).
In addition to its pension activities, ATP is also one of the largest Nordic benefit processors. ATP administers a range of welfare benefits and labour market schemes for the Danish State, for Danish municipal governments and for the labour market, including the old-age state pension, maternity/paternity benefits, disability pension, hous-ing benefits, various family benefits, employee protection plans against bankruptcies, occupational hazard insur-ance schemes etc. In all, ATP processes EUR 27bn worth of benefits paid out to 2.3 million citizens annually, rep-resenting 2/3 of all Danish welfare benefits.
ATP is a self-governed institution established by the ATP Act and governed by ATP’s supervisory board composed of six employer representatives, six employee representatives and an independent chairman. The Act explicitly dictates a fiduciary focus on investment returns, and allows for no political influence over investment decisions, administrative matters or executive appointments (including the CEO appointment).
Cost leadership and innovation in welfare administration
Modernizing the delivery of welfare using the “third sector” – combining private sector operational excellence with public sector understanding for the benefit of citizens – Carsten Stendevad will draw lessons from ATPs experience as both one of the best performing pension funds in the world and as the welfare benefit processor for the Danish state and local government. “Udbetaling Danmark” (“Payment Denmark,” unofficial translation) was established under the government led by Lars Løkke Rasmussen in 2010 with the aim of streamlining the delivery of objective welfare benefits such as old age pension, family benefits and housing benefits. The aim was to cut 1/3 of the costs while improving the quality of the delivery in 24 months. By implementing cost leadership in the entire value chain – and in the culture – of welfare provision, these goals were reached in spring of 2015 on time, on budget. This experience offers interesting broader perspectives for the delivery of other welfare benefits in a third sector including a broader set of welfare, utility and financial services.