Managing the Nation's Nest Egg
Benita Warmbold, BCom’80, is comfortable with big numbers. That’s a good thing, since she encounters them daily in her role as Senior Vice President and Chief Operations Officer at the Canada Pension Plan Investment Board (CPPIB). For example, according to a May news release, the CPP Fund topped $148.2 billion in fiscal 2011, a $20.6 billion increase over the previous fiscal year. They’re impressive numbers, especially as world markets are still scrambling in the aftermath of the global financial crisis.
Benita’s organization has but one client: The Canada Pension Plan. It invests all the money the pension plan holds in excess of immediate payout requirements, building the cushion to cover the future. It’s an important and noble task, one appreciated by this Commerce graduate who ironically chose to focus on accounting rather than finance while at Queen’s.
Your money is safe, Benita insists.
Benita Warmbold Her strategy has always been to keep her options open, and it has worked very well for her over the years. Born and raised in Toronto, she followed her brother to Queen’s, choosing Commerce to give herself a solid foundation in business. In third year, it was a toss-up between finance and accounting as a career choice. “I still remember many all-nighters working on case studies in finance,” she laughs. In her final year, though, she opted for accounting.
She became a CA while working in Toronto with Peat Marwick Mitchell, the precursor of KPMG, auditing a wide variety of companies, although, ironically, none in finance, where her career was to blossom. Though she received several offers from other firms, she declined them and stayed with KPMG for nine years before joining the Canada Development Investment Corporation (CDIC). This Crown Corporation was formed in 1982 to provide a commercial vehicle for the federal government’s equity investments and to manage the government’s commercial holdings.
During her eight years at CDIC she held numerous positions, her last as Executive Vice President. “The work was certainly challenging,” she says, recalling her role in the sell-off of the government’s stake in some storied companies, including de Havilland, Canadair, and the Hibernia oil fields development (originally taken on by the feds after Gulf had pulled out). With the CDIC winding down—it has since been reinvigorated, and she sits on its board—she joined Northwater Capital Management. Though not an investment specialist, she had accounting and CDIC experience as assets that helped her rise in the ranks, finally holding the position
of Managing Director and Chief Financial Officer. In this role, she was responsible for overseeing many complex activities, from creating sophisticated investment structures to gauging their operational risks. That plunged her into the world of derivatives, which, in the aftermath of the financial crisis, have lost some lustre.
“Derivatives have had a struggle,” she acknowledges. “When used effectively and in a controlled fashion they are a very important instrument in capital markets, but they have to be understood. Too often, people don’t take the time to understand what they are buying.”
Advisory Board members Sharon Ranson, Iain Bruce, Benita Warmbold and Bill Thomas at the May Board meeting.She had been 11 years with Northwater when the phone rang in 2008 with an unexpected opportunity. Would Benita be interested in joining the Canada Pension Plan Investment Board? With her accounting, Crown Corporation, investment, and management experience, she would be an ideal fit for the position of Sr. VP and COO. This wasn’t just any organization. This was—and is—the largest investment pool in the country.
“It doesn’t get any better in the world I work in,” she says of her decision to accept the position. “One, you are doing a great service for Canadians. Two, you are doing what you are doing in an organization that has the assets and the long-term mandate to do it in the best way possible.”
Assets did drop 18.6 per cent in CPPIB’s fiscal 2009, but have more than rebounded, gaining 14.9 per cent in 2010 and another 11.9 per cent in fiscal 2011. Overall, in the past 10 years the fund has generated an annualized return of 5.9 per cent. The Chief Actuary of Canada has declared the fund sustainable at the current rate of contributions for 75 years.
The CPPIB is the largest investment pool in the country.
Benita is married, with a son in third-year engineering at Queen’s. She lives in Toronto where she is active on several boards, including QSB’s Advisory Board, Queen’s Audit Committee, and the Alzheimer Society of Toronto. She has enjoyed keeping in touch with Queen’s classmates over the years, partly through her involvement with the University. “The network I didn’t know I was developing in Commerce at Queen’s has proved to be quite useful over the past 30 years,”
she says.
Her experience and impressive network have in turn proven valuable to her alma mater.
“This is the second time I’ve had the opportunity to work with Benita in a governance role,” says QSB Advisory Board Chair Jim Leech, MBA’73, President and CEO of the Ontario Teachers’ Pension Plan. “The first was on the Board of Harris Steel Group, in a fairly male-dominated industry. We welcomed her onto the Board by appointing her Chair of the Audit Committee. Within months, the company was sold. Quite the initiation by fire!
“Her ability to adapt quickly to changing circumstances in unfamiliar territory is what makes her such a stand-out. All Canadians are fortunate to have her on the team that is working for our retirement security.”