Nicolai Tangen: Hi everyone. I'm Nicolai Tangen, the CEO of the Norwegian sovereign wealth fund. And today I'm joined by John Graham, the CEO of CPPIB, which is the Canadian pension fund, basically looking after the savings of 22 million Canadians. Now, CPPIB is one of the most respected pension funds in the world, and the Canadian model has become a blueprint globally. Now, what makes John stand out is that he is a scientist first who found his way into one of the world's great financial institutions. And I'm really curious to dig in what your scientific mindset brings to investing, John. So, big thank you for joining us.

John Graham: Well, thank you for having me. Lot to cover.

Nicolai Tangen: Absolutely. Now, first of all, um could you help us understand just what the Canadian pension plan is? Just how is it different from a fund like ours?

John Graham: Sure. So, uh CPPIB Investments were the third-party asset manager for the Canada Pension Plan. The Canada Pension Plan is the uh mandatory program that all working Canadians contribute to. Um so, for it'd be somewhat similar if you were in the US to to to social security. Um so, it's it's meant to provide a inflation-protected you know, defined benefit for for working Canadians.

Nicolai Tangen: How big is it?

John Graham: Today, the fund, the CPP fund, is around $800 billion, but it's actually a a hybrid plan. So, just one of the things in that I think is important to to appreciate cuz it really has a big influence on how we manage the money, is about 30 years ago, the Canadian government realized that the CPP, um at its current contributions and benefit rates, was on a path to be exhausted. And this was because it was a pay-as-you-go program, money comes in, immediately goes out, and demographics were changing. You know, you you had a aging population, you had people having fewer kids, people living longer. And people living longer is obviously a good thing. Uh but the plan was on a path to being exhausted. So, they restructured the plan. They increased the contribution rate, modified benefits, and they created CPP Investments as the money manager to invest the funds, the surplus funds that aren't immediately needed to pay out benefits. Um and I think what's you when we started out, that plan is it was about 15% funded. So, really it was still a pay-as-you-go plan. And over time, our very first check was $12 million. So, we got a check for $12 million uh uh about 27 years ago. Today, the plan sits about 800 billion. And the plan is partially funded, meaning that

Nicolai Tangen: you are and you are independent from the Canadian government?

John Graham: Yeah.

Nicolai Tangen: How how how hard is that to protect that independence?

John Graham: Yeah, we were created to be independent with respect to investment decision-making, but we're still accountable. We still have accountabilities cuz we're accountable to to all Canadians. And I think this is something that the Canadian government recognizes is important um to have both independence with investment decision-making. And that's enshrined in federal legislation. So, when we were when we were when we were created, the CPPIB Act basically enshrined our mandate to maximize return without undue risk of loss. And you asked the question, how do we differ from, let's say, a sovereign wealth fund? And I think the big difference is we're pension plan, which means that we have liabilities.

Nicolai Tangen: So, when people when people try to replicate the Canadian model, what do you say that they get wrong?

John Graham: What do they get wrong?

Nicolai Tangen: Yeah.

John Graham: First I think the first important thing is governance. And pretty much all the Canadian plans have some similar level of governance in that there is independence around investment decision-making, but obviously accountability for to the key stakeholders. And that independence around investment decision-making provides the flexibility or to build a investment organization that has a lot of levers to pull for driving returns. Public versus private, active versus passive, domestic versus global. And I think having I'm a big believer in optionality and having those various levers to pull over the long run drives value.

Nicolai Tangen: And we will get back to to some of them, but just in the meantime you got eight pension funds in in Canada, right? Sometimes called the Maple Eight. So how how did Canada develop this approach?

John Graham: Yeah, and I there's there's definitely more than eight, but there is a term term Maple Eight that uh really captures probably the eight biggest. There's now Maple Nine, so there's another plan kind kind of coming in to Maple Nine, and sometimes it's Maple 10.

Nicolai Tangen: Is it good Is it good to have so many pension funds?

John Graham: It's good. It's good. And and you know, I I I think the they're very well run. They they have uh have had good governance, good performance. I've never been a huge fan of the Maple Eight concept because I think one thing it does miss is that we're all a little bit different in that we all have different liability streams. We're all pension plans. So we all have liability streams. Like at the end of the day, we're investing the money to meet the pension promise. So in Canada, across 22 million Canadians, a promise has been made, right? So at every paycheck you have a deduction that says CPP. And what you get in return for that deduction is a promise. A promise that when you retire, you're going to get a a pension. And our job is to make sure that we meet that promise. So

Nicolai Tangen: So in order to meet that promise, you need to invest well, right? So, here you are 800 billion. Just how do you how do you decide where the money goes? How do you decide how to split the asset classes?

John Graham: So, so we are very linked to our our mandate. Max our mandate enshrined in federal legislation is to maximize return without undue risk of loss accounting for the factors that impact the funding of the plan. That's our mandate. And so they you got to invest the money maximize return, try to grow the funding ratio of the of the plan and make sure that we can meet these obligations or these promises that have been made.

Nicolai Tangen: And you and you don't have like we have a mandate where which the ministry gives us which tells us, you know, how much shares, how much bonds. You don't have that.

John Graham: We don't have that. Literally our mandate is is maximize return without undue risk of loss taking into account the factors that impact the plan.

Nicolai Tangen: So, you know, here here you are John Graham 800 billion. Go and see what you can do with it.

John Graham: What started as 12 million and now it's 800 billion. So, and of that 800 billion 550 billion is investment income. It it does show the power of compounding, right? So, 70% of the fund is investment income. And so we only, you know, quote unquote own the entirety of the investment process. So, to be a little bit technical, we take that and think there's kind of three big decisions we make and we take a total portfolio approach and and fundamentally we try to maximize the total return of the total portfolio. So, the first big decision, what level of risk are we going to take? What level of risk will maximize return without undue risk of loss? How do we thread that needle of taking our time horizon? So, recognizing, and I think this is really important, we're pension plan, we're not a wealth maximizing vehicle.

Nicolai Tangen: What's the difference between the two?

John Graham: That we will at time, and I would actually argue we may be in that time right now with the concentration risk in the markets, there will be times when we are not looking to fully participate in the market in parts of the market where we feel there might be an undue risk of loss. So, we are not always maximizing. When we think about the upside and the downside, there are times when we may give up a little bit of upside to protect the downside because we think at this moment in time that's more important for um thinking about the liability stream or the liabilities we have uh to to to to meet. So, risk What level of risk are we going to take? That's number one. Two, asset classes. How are we going to diversify? And you'll hear me say this probably a few times, diversification is an act of humility. We don't know. And and and we do firmly believe in diversifying across asset classes and geographies as ultimately a risk management tool. Um the third decision is security selection. Um what which companies which assets do we want in the portfolio?

Nicolai Tangen: Now, you uh you don't operate in asset silos, is that right? Just how do you How do you think about the various assets?

John Graham: Yeah, so in the total portfolio approach, we we we definitely try to do our best not to get totally siloed into thinking about asset classes and having fixed hard allocations into asset classes or into geographies. We think in factor space. We think about what's the real economic exposure we're bringing into the portfolio, whether it be, you know, duration, inflation sensitivity, whatever it may be, um knowing that asset class labels can be a little bit misleading. I mean, personally, I don't view public equity and private equity as as different asset classes. I view them as different kind of ownership structures within equities and they have different ways of behaving through through through through the cycle. So, we try not to get hard allocations into asset classes, hard allocations into countries cuz that can lead to some strange behavior when you're trying to rebalance the portfolio, but think about what are the correlations between the different asset classes. That being said, we are organized by asset class, so we do have kind of of soft allocations into asset classes and we do ask people into the execution side to really understand their asset class, whether that be real estate or infrastructure, or credit, and to build portfolios in their asset class.

Nicolai Tangen: What are the kind of things you don't do?

John Graham: We don't do. Um There's very little we don't do uh at at 800 billion. And it's probably similar for you, but there's but there's very little we don't do

Nicolai Tangen: Mhm.

John Graham: in that we also believe that we do not follow a path of blanket divestment. So, take oil and gas. We have continued to invest in oil and gas. We have continued to support the oil and gas industry. We do not have a uh we never take a path of blanket divestment. So, there's no industry that that's off side for us. Now, there's some things we make a deliberate choice not to do. So, take from a geography perspective. We're really We We probably have exposure to 50 countries around the world, but we're probably only really active in 12 because we just can't really be experts in every country around the world. So, we will prioritize and decide that we're going to really focus maybe in on 12. With respect to asset classes, we've chosen the big ones, but you know, one thing we've never done is crypto. We've never directly invested in crypto. And I don't know how much money you want to spend on that.

Nicolai Tangen: been that's been pretty good lately not to be in that one. But uh um one asset class where you are where we are not is uh private assets, so private equity, private credit. Um Now, you are You have one of the largest private market portfolios of anybody in the world. And so, what is your view on that asset class just now?

John Graham: Yeah, so I think we take a long-term view. And you know, private equity undoubtedly has had a more challenging couple years. Um we can get into that. But if I look over the past 10 15 years, it's been one of the biggest drivers of return for the for the portfolio. I personally continue to be a believer in the in the pri- the private governance model. I think for certain companies at certain times in their life cycle, private ownership makes a lot of sense. Um getting out of the scrutiny of the public markets, um hav- having the investors be very actively engaged from a governance perspective on the board of directors. I think there's at certain points in time, private ownership makes a lot of sense. So, we continue to be constructive on private equity. Recognizing though that right now, you know, the returns has been well documented over the past couple years have not been, you know, at expectations. But if I look over 10 15 years, it's it's been a big driver of value for CPP Investments.

Nicolai Tangen: And you you measure your returns against um kind of a benchmark portfolio which consists of Is it bonds and equities?

John Graham: Yeah. So, we have a benchmark portfolio that is basically matches kind of the big asset classes that we invest in. So, it's bonds and equities, but there is also some sector specific indices in there. Whether it be real estate, credit, uh infrastructure, energy. And you know, I think right now, looking at at private equity, I mean, one of the challenges we have is the the public markets, especially the broader markets, are just very concentrated and very concentrated into a a handful of US-based technology stocks.

Nicolai Tangen: Yeah, which is not what our portfolio looks like.

John Graham: No, no. No, no. Uh this is a a challenge for most active managers uh these days. Now, uh you manage a lot of your uh private exposure internally. Uh how do you make the choice between outsourcing that uh versus uh actually managing it yourself?

John Graham: Yeah, and and uh the way I describe our approach is it's a partnership model. So, for take private equity, we we do invest in um private equity managers around the world who we think are the best in and the best investors in their space. And then we do co-investing and co-underwriting with them. Some other programs, like infrastructure and energy, historically, we may have been a little bit more direct, but we certainly do have some kind of external relationships. And here's a case for me though that uh these are choices. These are choices the organization makes. And I come back to what we're solving for. We're solving to maximize the total return of the total portfolio. So, we are you know, we see value in having direct and and fund relationships. Um exactly how much we have of each is just going to be based on where we get the best returns.

Nicolai Tangen: Who does better? Your external managers or your guy your internal guys?

John Graham: Well, you have to think about often why you're doing the internal. So, the the internal you office often have co-investing and co-writing underwriting at kind of advantageous economics. So, you're not paying the the the the

Nicolai Tangen: [laughter]

John Graham: the full fee and promote or carry the performance fee. So, I think it's hard to say who does better because your internal teams are benefiting from the origination and the asset management of the external teams. Um so, they're not totally separable, right? Like they don't compete with each other. The internal teams are actually building off of the uh the the external um the external managers. So, I actually think what's important is to mash them together and look at the blended returns of two as opposed to thinking of them as two separate competing kind of investment strategies.

Nicolai Tangen: Absolutely. Now, John um Canada and Norway compete in ice hockey. Um but but let's not talk about that.

John Graham: Oh, really? They do?

Nicolai Tangen: But no, well, I I saw you there. But we also But more importantly, we we we we compete in uh transparency, right? Because there is just uh FYI for the listeners, there is the World Championship in transparency. And and uh and you guys and us, we typically uh you know, together are at the top of the the the league table here.

John Graham: Yeah.

Nicolai Tangen: So, why why in your mind why is transparency important?

John Graham: Yeah, and and and I and I I will concede I think you've gotten the gold medal the last couple years.

Nicolai Tangen: Well, I think we're doing we're we're both doing really well here.

John Graham: We're tied for two. So, for for us at at CPP Investments, transparency is something that we take very seriously. And part of it comes back to our purpose and and who we are. We're a you know, mandatory retirement program that all Canadians contribute to. We manage $800 billion of what is largely a you know, public good here in in Canada. So, we have taken an approach to disclose at a level that isn't even beyond what is required under um the CPPIB Act. With a view that Canadians should understand how their money is being uh how the money is being invested and uh how the cost of base that we have within within CPP Investments. So, within our quarterly statements, we we release pretty much every investment we make. So, we have transparency there. And we provide a lot of information on how we run the fund, our various frameworks for running the fund. And we think it's important because of who we are.

Nicolai Tangen: Yeah. Yeah. John, let's spend a few moments on the geopolitics. How much of your investments are are in Canada?

John Graham: We have about 12% of the portfolio in Canada.

Nicolai Tangen: Yeah. And what about the US?

John Graham: We are it kind of ebbs and flows again. We don't have hard allocations. 45% plus or minus a few percent. It It can get up to 50, but

Nicolai Tangen: you're probably you're probably similar in that the US has been an incredible market over the past 10 years.

John Graham: Absolutely. Absolutely.

John Graham: And And our one of our biggest challenges is if if we don't manage it, it'll just keep growing and growing and growing as part of the portfolio. So, we actually it's one area we do try to manage around that 45 to 50-ish percentage range.

Nicolai Tangen: Is there any kind of political what should we say not interference, but any political indications in terms of trying to get you to reduce your US exposure?

John Graham: No. No. I mean, certainly I think the people would like to see us invest more domestically in in some areas, especially right now. And I will say from a Canadian perspective, Canada's looking more interesting than it has in in years. And part of that

Nicolai Tangen: is that?

John Graham: Yeah, and part of that is the ambition. You know, there's an ambition at the provincial level, at the federal level to build things and to build big things. And pension funds like us like infrastructure. We like big assets that are cash generative. So, there's definitely a lot more kind of curiosity about investing in Canada than it has been in in years. So, people certainly would like to see us invest more in Canada and and we're actively looking at investment opportunities, but we'll always do it with our mandate in mind. You know, what when we were created.

Nicolai Tangen: The the government is trying to attract foreign investors. Do you think you would always get kind of the goodies? The best bits?

John Graham: No, I don't. I actually don't and I think this this is I think this I look at the US. The US is the most competitive market in the world. It's most competitive capital market in the world and it's been delivering the best returns. Competitive capital is a good thing. The ambition this country has in Canada for building things, it's going to require domestic and foreign capital. And we're a big advocate that that we should seek competition for capital. It'll drive the cost of capital down and it'll ultimately lead to to better investment opportunities. You'd ask about the US. I mean, people appreciate that it's a it's from a market cap perspective, I think it's what 70 65 70% of the the global equity markets. So, even at 45% there's an argument that we're actually underweight the US.

Nicolai Tangen: What about China?

John Graham: Yeah. It's an interesting question and and China is a market where we've been active for quite a while. You know, my my predecessors were incredibly knowledgeable and well connected into in into China. Our exposure to China has declined over the past few years. Part of that is because the the rest of the portfolio has grown around it. You know, there there hasn't been a we haven't been selling assets per se, but the the rest of the portfolio has been growing around it. We maintain a a reasonable I think allocation into China. My personal view is and if you want to be a long-term investor, you have you have to have some level of investment in the world's second largest economy. Um, you also have to have a certain amount of knowledge about the world's second largest economy because it has influence, uh, real influence around the globe. So, we've maintained our understanding, our some of our relationships in the in the market. Um, I think for China it's always a case of of how much of the portfolio and then how. What industries, um, what sectors do we want to, uh, invest in? Knowing that there's some areas like obviously be very sensitive to get into defense or to get into dual-use technologies. So, you have to think about how you want to invest.

Nicolai Tangen: Yeah. Talking about, uh, that, how does AI change the way that you run your organization?

John Graham: That's a good question. That's a good question. I mean, I think we're I think we're figuring it out like lots of people. Um, and and and probably go through lots of peaks and troughs in thinking about the the impact of of AI. As an organization, we certainly have prioritized literacy and fluency. Certainly prioritized trying to have a employee base that is very fluent in the tools and the technologies. So, we have rolled out multiple LLMs to every single employee in the organization. And we have provided, uh, training. We've provided courses and in fact, um, we have these kind of bootcamps that employees can can sign up for. So, we've seen pretty good adoption, pretty good, uh, you know, I think actually very good adoption on at the grassroots level of from AI. More senior level, there's probably half a dozen processes we're thinking through on where can we really embed AI to do it more efficiently, more effectively, but a little bit more from the operations side. Has AI made us a better investor? Have we made better investment decisions because of AI? At this point, TBD. At this point, unclear. But we are dedicating a lot of time and uh effort to figuring that out.

Nicolai Tangen: When you see when you see 10 years out, how do you think it will change the way you work?

John Graham: Yeah. That's the one thing, too, that um as we think about AI, and I do believe the organization has really tried to adopt it, and we we've given people a lot of license to to try to use in their daily life, and encourage them to just be more efficient. And I don't know if this is AI or just good old-fashioned process optimization, but over the past 3-4 years, we at CPP Investments, we have fewer employees than we did 3 years ago. Not by a lot. Let's call it basically flat, but we have about 300 billion more of assets. Um so, I think we're more efficient. And And has AI contributed to that? Probably. AI's been contributed to that a little bit, or or at least has kind of put a fire under people's feet to to to think about efficiency. 10 years from now, where my mind is, like I'm not in the place of we we should stop hiring juniors. I think it's madness to stop hiring juniors, because I think cuz 10 years from now, they're going to be the future leaders of the organization, and, you know, unless I've made terrible life choices, I won't be here 10-15 years from now. So, so we're going to keep hiring juniors. What I think this allows us to do is just get operational leverage. I don't see the organization from a people perspective being a lot smaller, um but what I do see is we can add hundreds of billions of assets without really um adding a huge amount of of cost or or or people. And will it help us make better investment decisions? I think I'm still TBD on that. I don't know what your perspective is. I'm still TBD as to it'll help us make faster decisions, yes. Will it help us make better decisions? TBD.

Nicolai Tangen: Yeah, no I I would disagree with you. I would disagree with you.

Nicolai Tangen: Let's spend a few minutes on you as a leader. Um, how do you think your scientific background has formed you as a leader?

John Graham: [snorts] Yeah, and and probably formed as a in a permanent investment perspective. Wait a second. There's not many things I know in life with certainty. But one of the things I know with certainty is I'm not a scientist anymore. Investing is not science. Even um even though I'll see these incredibly sophisticated models, these incredibly quantitative approaches, investing, I believe, is not science.

Nicolai Tangen: If it's if it's not science, what is it?

John Graham: It's a little bit of art and science. It's a It's a quantitative art.

Nicolai Tangen: And what kind of art is it?

John Graham: [laughter] But it's an art that requires judgment. It's an art that requires experience and an art that that actually does require, I think, and that's a little bit of why with AI that I'm I'm I'm I'm cautious on whether it'll help us make better decisions. I don't know. It may. Is in science, and I I was an experimental scientist, right? We could do an experiment in Toronto or in the States and someone could replicate that in uh Japan and they could replicate it in 5 years from now and 10 years from now. Investing is this living ecosystem that's changing every day. And our models for which were were CBB Investments I describe as a very evidence-based, probably quite quantitative organization. And I believe it's the right approach and that it helps us think through it, but at the end of the day they are just they're our best guess at how the the world is going to unfold and until someone gives me data on the future, we are still trying to forecast out the future with a certain amount of uncertainty.

Nicolai Tangen: And to run to run a company in in that environment, what are the most important leadership principles you have?

John Graham: Yeah, so one of the things I've learned and probably learned the hard way through my career, um and I do believe this is every leader has a certain kind of call it a preferred habitat. Every every leader has a style that is really reflective of who they are and how they want to approach a problem, whether you're a super empathetic leader, whether you're a pacesetter, a taskmaster, whatever it is. I have learned that at certain times you need to be situationally aware. And whether it's the what's going on at the time or whether it's and sometimes the individual and being able to flex the leadership style a little bit, not losing sight of the of the mandate, not losing sight of the mission and where you want to go, but being able to flex a little bit on what you're how you're going to approach it, you know, I

Nicolai Tangen: Tell me tell tell me about tell me about a time you really flexed it.

John Graham: Sure, I'd say COVID. Um when people were scared, huge amount of uncertainty, people were worried about their health, worried about their um jobs. And I think we needed to lean into empathy at that time. Um and and I think we did lean into empathy.

Nicolai Tangen: Did that come na- Did that come naturally to you?

John Graham: Well, I'm probably a little bit more of a pacesetter. I'm probably someone who also is a little bit more like even coming back to COVID, I'm definitely someone who is more of an in-office person who believes that we need to be in the in the office. And I've had to you know, modify my approach a little bit to make sure that um we still give people agency and we still give people a feeling that they have that they're empowered to make decisions around their around their careers.

Nicolai Tangen: Now, our uh listeners are uh when we um when we kind of poll them and ask them how they want to What do What do they want to have more in the poll calls? They say they want to hear more about failures, you know? They only talk about successes and everything is so great and uh you know, tell me about some of your biggest mistakes in life.

John Graham: So, my big failures?

Nicolai Tangen: Yeah.

John Graham: Okay. Well, I think as you know, in when in in investing, you you you do have the opportunity to have failures. And you you you have the opportunity to be humbled. And any investor who says they haven't been humbled um is is probably not either taking a lot of risk or is is not being overly uh truthful. So, certainly some of the investments I've been actively engaged on um have not turned out as as planned. So, what have I learned from that? One of the things and one of the things I try to tell our our our younger colleagues too, which I do believe, is you you you can't diligence a bad investment into a good investment. Spending another week is is not going to turn a fundamentally bad investment into a good investment. And in fact, you you you may just convince yourself that it is. Um and sometimes you have to know when to quit. And you have to know when to back away from uh an investment. If I think about where mistakes I made and failures I had, just this belief that if you just did more work, if you just structured it, or you could take a bad investment, if you could just structure it a little bit more, you could turn it into a good investment.

Nicolai Tangen: What's the worst one you had?

John Graham: My worst I'm not going to name the name of it.

Nicolai Tangen: [laughter] What about What about on the personal level? What about like your personal mistake?

John Graham: The biggest failure on the personal level?

Nicolai Tangen: Yeah.

John Graham: I think the one thing we all learned too in in in in in leadership roles that getting the right team around you is the most important is one of the most important things. Having a senior team that is aligned to where you want to go that is as bought into the vision and the mandate of the of the organization and will truly act as team one. Will be there to support each other and be there to support the um the organization. And I think you also have to realize that when it comes to hiring people, when it comes to the teams, you never get it perfectly right. Uh and and so I think one of the most important things is to make sure that you get your right team in place.

Nicolai Tangen: And were you too slow in doing that?

John Graham: I think like most people, you end up being too slow. You know, if if I ask leaders what are some of their biggest regrets, is that they waited too long to get their team in place. Um and guidance I give new CEOs is this is is of the first things you should do. Is when that one year anniversary hits, you should be able to look around your senior team and say this is exactly who I want with me at this point. Because one thing we've also found is I've been in this role for over five years, it has gone by in a blink of an eye.

Nicolai Tangen: Absolutely. Uh same here. I've been close to six. It's just like bang, as if we started yesterday.

Nicolai Tangen: Now, um tell me about the culture. What do you How would you describe the culture?

John Graham: Yeah, I would describe the culture of CPPIB Investments as very purpose-driven. So, who we are, right? Like it's not lost on anybody the important work we do for for Canadians. And every time we do, which I'm sure you do, employee engagement surveys and various kind of employee suggestion kind of uh surveys, the one thing that always comes back that is a pretty much always our highest score is that people believe in and are are really motivated by the purpose of the organization. And I think the culture has largely formed around that the the kind of the purpose-driven nature of the of the organization.

Nicolai Tangen: How do you set the expectations beyond which you perform well above average well above expectations and you know, the proportion who you think needs to improve? Just where you set it.

John Graham: Yeah. Yeah. And and and I think this is one of the challenges um for organizations such as such as ours. The we are ultimately investing as a talent-based organization as a talent-based business. Um and so I think we have to be very rigorous on talent. One of the things that I will tell the senior leadership in the organization is at the end of the week you should be able to look at yourself in the mirror and and answer two questions. One, that you helped drive performance, and two, that you help develop the next generation of leaders. So, every single leader, that that performance and people are two of the the expectations to be a leader at CPP Investments. So, I think we take talent development very seriously, ensuring that that we really do um have the best people working here. I think one of the needles we have to thread is we're this enduring institution, similar to you. In that we have to be here 50 years from now. We have to be here 75 years from now. We are almost by definition the exact opposite of a founder organization. We're almost the exact opposite of a founder-led culture. So we have to actually, in some ways, institutionalize the culture, institutionalize the uh investment process. And it can never be about the individual. Um because that's not how you build a durable, sustaining organization. It has to be about the purpose. It has to be about the mission. It has to be about the mandate. But, investing is a lot about individuals, right? And and investing is a lot about, you know, you these great investors. Um so, what we can't have at CPP Investments is a star culture. We We can't build investment programs around individuals. We have to build investment programs around organizational strengths and advantages.

Nicolai Tangen: What other part of the culture are you trying to improve?

John Graham: Trying to improve the I would say a a a little bit on just what I what I mentioned. And it's ensuring that everybody really understands why we're here. Um we have one fund. We have really kind of one mandate to maximize return without undue risk of loss. So, how do we really embed that owner's mindset into the organization? How do we really embed that one fund mindset into the organization to ensure that everybody is thinking long term and everybody is thinking about how do we maximize um the long-term returns of the of the of the portfolio. And investing's an interesting you know, it's an it's a fascinating business to to be in. Um so, in a lot of organizations, it's very much about the individual. They're selling almost an individual's kind of je ne sais quoi with investing. And here at CPP Investments, saying, "How do we get people to really buy into that one fund mentality?" And to really think about how do we compound the value of the platform? How do we make this organization a more valuable platform 5 years from now than it is today?

Nicolai Tangen: Do you think Do you think the culture is a reflection of your own personality?

John Graham: I actually don't. I actually don't.

Nicolai Tangen: And where is it different from you?

John Graham: Well, well, I'm not sure if if it's different because I don't think you can lead this organization if if if if you cuz I think the culture I set is very purpose-driven. So, Yeah, but you are you So, are you? Yeah, exactly. So, I think people who aren't purpose-driven will either self-select out or be selected out. You know, I think when people exit this organization, um it's often because that they're they just aren't aligned to the purpose of the of the organization and want to do something else. We have a lot of amazing uh ex-ex-colleagues. So, I think from a from a culture perspective, I think the I I I you know, it's terrible to say, but I I think you got to conform to what the the CPPIB culture is if you want to be a leader here. And one of the things I find amazing, and I do find this amazing, we have seven offices outside of Toronto, and and we all get it. We're the We're the Canada Pension Plan. It's in the name, right? Like Like we we are managing the retirement savings of 22 million Canadians. But we have colleagues in London, in São Paulo, in New York, in Hong Kong, in Mumbai, and the culture there is remarkably similar. Remarkably similar. Like they are I'm motivated by the purpose. They get it. We spend a lot of time talking about it, and I bring people to our offices around the world, and one of the common things they say is like wow. Like we're in Mumbai, or we're in Hong Kong, but you would have thought we were in Toronto the way they were talking about the purpose of the organization.

Nicolai Tangen: Mhm. How do you make sure it doesn't become bureaucratic?

John Graham: Well, that's a very good question, and I would say that is a constant and um requires constant effort, cuz most bureaucracy is is put in place for very good reasons, and uh made sense at the time, and then it just kind of takes on a life of its own, like a like a like a Frankenstein that grows over time and gets fed and and becomes unmanageable at uh at some point. I am sure if you ask some of our colleagues, they would give you very different views on how bureaucratic we are. Um I think it's something that we try to thread that needle. Sometimes well, sometimes not as well as How do we empower people to and delegate to people so they can make decisions. I am a big believer that decisions should be made by the people who are closest to the information. So, how do we delegate to people, let's say on the investment side, into the various geographies and asset classes so they can make decisions, but ensuring that they are aligned, you know. Delegation without alignment leads to chaos. So, how do we make sure they're aligned and they understand what we're solving for? And then, um, I have to periodically, you know, I found in this job like once every so many years, kind of hit a pause button and do a decluttering of the of the bureaucracy because uh, I've also learned that it only goes one way. It

Nicolai Tangen: Absolutely.

John Graham: you will not naturally, you know, de-bureaucratize. [laughter] It'll just always add, always add, and then every once in a while you got to slam that pause button and just start purging some of it out and then let it to start accumulating again.

Nicolai Tangen: Yeah. How do you switch off uh, outside work?

John Graham: Yeah, probably not well. Probably not well, but the I think we we learn things about ourselves. We learn what recharges our batteries. It probably speaks to whether we're introverts or extroverts uh, at heart.

Nicolai Tangen: How do you charge?

John Graham: How do I charge it? I I actually charge, I have learned this and you can ask my friends and my family. I have three dogs. I will um, put on my ear put in my earbuds, take the dogs for like a 45-minute walk at night, listen to podcasts, listen to audiobooks, and just in some ways kind of disconnect a little bit. It's not the best way when you have to recharge by basically being alone for 45 minutes at the end of the day, but I have found in this role that it it's probably what charges the battery the fastest.

Nicolai Tangen: Hm. What do you listen to?

John Graham: What do I listen to? So, I don't listen to fiction. I don't read fiction. Um I like to listen to podcasts on history, a lot of podcasts on history. I came across one recently that was an older one called the history of Rome. I think it had 170 episodes that I listened to. I loved it. Um so a lot on history and a lot on business, whether it be the Financial Times or Bloomberg, the various business or investing podcasts.

Nicolai Tangen: Mhm. Now, we have a lot of young listeners. What would be your advice to them?

John Graham: So, yeah, I have two children. They're 23 and and 20. So, um I always give the the advice that I give them. So, it's it's the [laughter] same advice that I give my own children who are really just starting their professional career. And the advice I give them both of them is keep learning. Um just always keep learning. Yeah. Keep learning about your job. Um never stagnate. Uh this is one thing I've seen in my career is it was people going to cruise control and they become complacent. And jobs evolve and jobs will evolve away from them. So, keep learning. Keep learning about your job. Keep learning about other jobs that people are doing in your in your organization. Don't be don't be complacent and you are going to have to take some ownership of your career. And think about what you want to do and make sure that you know, your value to the company is only increasing.

Nicolai Tangen: Yeah. Well, John, that seems like really sound advice. It's been really great talking to you. Please keep up all the good work on behalf of 22 million Canadians.

John Graham: Great. Thank you very much. I really appreciate the opportunity to share the story.

Nicolai Tangen: Mhm.