ATP Loses Chief Executive | Chief Investment Officer

carsten stendevad atp Carsten StendevadCEO Carsten Stendevad will leave ATP after three years as chief executive, the $120 billion Danish pension fund announced Friday.

Stendevad’s resignation comes just two months after ATP lost CIO Henrik Gade Jepsen in June. The departing CEO said he is leaving the fund in order to relocate to the US for “family reasons.”

“It has been an honor to serve as CEO of this great institution,” Stendevad said in a statement. “I have enjoyed every day here at ATP, and I am proud of the results that my colleagues and I have achieved. My focus will now be on securing a smooth transtition.”

Stendevad leaves behind newly appointed CIO Kasper Lorenzen, who took over the fund following Jepsen’s exit. Executive search firm AMROP will lead the search for Stendevad’s replacement., with Stendevad assisting in the transition.

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“On behalf of the board of ATP, I would like to thank Carsten for his outstanding performance as CEO of ATP,” said Jørgen Søndergaard, chairman of the fund’s board of supervisors. “Carsten is handing over an ATP in great shape to his successor. I am sorry that Cartsen has to end his tenure at ATP, but I understand and respect his decision.”

Stendevad was appointed CEO of ATP in April 2013. Previously, he held private sector roles at Citi and McKinsey & Co.

He holds masters degrees in economics and public policy from the University of Copenhagen and Harvard Kennedy School of Government.

A CIO’s skill in fund selection is one of the most important factors in determining private equity returns, research has claimed.

An analysis of more than 12,000 investments by 630 limited partners (LPs) found that skill was more likely to be a factor in high returns than luck or preferential access to managers.

Daniel Cavagnaro and Yingdi Wang of California State University, and Berk Sensoy and Michael Weisbach of Ohio State University studied venture capital and buyout fund investments made between 1991 and 2006.

“Our results imply that an increase of one standard deviation in skill leads to about a 3% increase in internal rate of return [IRR],” the quartet wrote. “The magnitude of this effect suggests that variation in skill is an important driver of institutional investors’ returns.”

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The effect was even greater—5%—with venture capital investments, the researchers said. LPs performed consistently well or consistently poorly in private equity fund selection, implying “differential skill” rather than pure luck.

The researchers also singled out first-time funds in an effort to analyze the effect to which some general partners only allow their “favorite” LPs to invest. This analysis showed that skill in fund selection was still an important factor in achieving desired returns.

“Systematic differences in returns across LPs do not appear to occur only because those LPs have better access to the best private equity funds,” the researchers reported.

“Better access does appear to help explain some of the superior performance, such as that of endowments’ investments in venture capital during the 1990s,” the authors concluded. “However, the evidence of some LPs’ systematic outperformance goes well beyond established venture capital partnerships during this period, and appears to exist in first-time funds, in buyout funds, and in other time periods as well.”

Read the research paper, “Measuring Institutional Investors’ Skill from Their Investments in Private Equity.”