Prof Andrew Ang to Lead BlackRock’s Factor-Based Strategies

Andrew Ang1 Andrew Ang, Columbia Business SchoolBlackRock has poached finance Professor Andrew Ang from the Columbia Business School to lead its factor-based strategies.

In his new position beginning July, Ang will manage $125 billion in assets through exposures to different risk premiums, the world’s largest fund manager said.

“Historic sources of outperformance are so widely understood and incorporated by investors that their impact has diminished,” said Ken Kroner, global head of BlackRock’s multi-asset strategies. “To generate sustainable investment results, investors will need to use data and technology in factor-aware investment processes.”

Kroner, to whom the professor will report, lauded the 42-year-old as “a leading light in this arena” and said his expertise and experience would be ideal to guide BlackRock’s initiative into factor investing.

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“With BlackRock’s established systematic investment platform, along with its data analytics capabilities and superior talent, this is the perfect opportunity for factor investing to truly transform asset management,” Ang said in a statement.

He continued that the firm’s credibility in the industry and its support of factor-based strategies will be “critical in educating investors and clients about these important developments in portfolio construction and active asset management.”

For 15 years at Columbia, Ang focused on the role risk and return play in determining asset prices, specifically in factor risk premiums across asset classes.

“Overall, I want to help asset owners answer questions like ‘How can they make better portfolio decisions?’ or ‘How can they match their factor risks across their assets and liabilities,’” the Ann F. Kaplan Professor of Business told CIO in 2013.

The financial economist also consulted for large institutional investors including the Canada Pension Plan Investment Board, Norges Bank, and the UAW Retiree Medical Benefits Trust.

Ang has a bachelor of economics from Australia’s Macquarie University, a master’s degree in statistics and a PhD in finance from Stanford University.

Prudential has sealed a £680 million ($1 billion) buy-in deal with the Northern Bank Pension Scheme, one of the biggest de-risking deals in the UK this year.

The arrangement covers “most” of the current pensioner members of the fund, according to advisers LCP.

Northern Bank is based in Northern Ireland and is owned by—and trades under the name of—Danish firm Danske Bank. At the end of 2012 the pension was valued at £852 million, with a surplus of £82 million.

Michelle Wright, partner at LCP, said the arrangement “incorporates strong security provisions to maximize the security of members’ benefits”.

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“The policy also includes innovative provisions and flexibilities to add new retirees to the policy in future on efficient terms,” she added.

The Northern Bank deal’s size overtook the year’s previous biggest buy-in/buy-out transaction, Rothesay Life’s £675 million buy-in of the Lehman Brothers International UK pension. The UK’s largest de-risking transaction this year remains a £2 billion longevity swap deal between the ScottishPower pension fund and three reinsurers, overseen by Abbey Life.

In North America, Kimberley-Clark offloaded $2.5 billion of pension liabilities to Prudential Insurance Company of America and MassMutual in February, while Canadian telecoms group Bell sealed the country’s biggest de-risking deal in March with a C$5 billion longevity swap with Sun Life Financial.