Relocating to the virtual office

Topi Piela, CEO of Yleisradion eläkesäätiö, talks about guiding the Finnish pension fund through a major digital transformation and why he now prefers online meetings.

When the investment allrounder Topi Piela stepped at the helm of Yleisradion eläkesäätiö at the end of last year, he did not expect to lead the EUR 822 million pension fund through some of the most dramatic changes it has seen during its lifetime. The sudden change from office to virtual environment, brought on by measures aimed to combat the spreading coronavirus pandemic, initiated a large-scale digital revamp at the pension fund to enable its team to effectively work from home. “Working from home was new to us as we didn’t have an established culture for that. That was something we didn’t used to do before the pandemic,” Topi Piela explains.

The new circumstances demanded drastic measures on the digital front as well as a new approach to working as a team. “It wasn’t quite straightforward. Along with updating and upgrading our systems and checking all the other prerequisites, such as insurance cover etc, we did a lot of work around remote working as well as guiding and training the team,” says Topi Piela.

Some of the biggest challenges in the digitalisation of the pension fund’s systems were IT security, permissions of using different data, vpn and access to the cloud. “After that, we tested apps and programs and made some upgrades. Of course, some older laptops had to be changed to new ones as well,” he explains. He adds: “After solving all technical challenges, we coached everyone to use their software securely and also made some agreements on how to communicate with each other.”

Since the lockdown, all of the pension fund’s internal meetings were moved online and Topi Piela notes he will favour online meetings in the future as well. “Conference calls and online working was not new to me, so personally moving online has not been a challenge,” he says. “In the future, I will prefer working and meeting people online through calls and webinars. I met up with our asset managers before we moved to remote working and everything has continued to run well, so I’m looking to increase online meetings in the future.”

Topi Piela is no newcomer within the Finnish investment industry. In fact, he has worked in several different roles across both the buy and the sales side before his post at the pension fund, which caters for the employees of Finland's national public broadcasting company. Among other things, he has led the Finnish pension giant Ilmarinen’s equity team between 1998 and 2000. He has also held several board positions in different Finnish companies throughout his career and was part of the investment consultative committee of the Finnish state pension fund VER for 18 years until 2018. Furthermore, he was a member of the board and audit committee at the Finnish pension company Etera until it merged with Ilmarinen in 2018.

Asked about taking on the role as CEO of the pension fund, Topi Piela says that the social importance of looking after pension assets was one of the things that attracted him to the job. “Working at a pension fund is a challenging task that requires a broad understanding of both the pensions field and the investment world,” he says.

When asked how working in a smaller pension fund differs from working at a larger player, he responds: “In larger pension companies, you tend to work in silos and within your narrow field of expertise. At Yleisradion eläkesäätiö, we need to be very hands on with the planning and implementation of our overall investment strategy, which enhances the importance of really understanding your asset classes, investment instruments and the regulation that drives and affects the decisions we make.”

In that respect, he says he has gained a lot of insight from his time on the asset management side. “That has helped me to understand the typical characteristics of different asset classes and investment instruments and the relationships between them. It has also given me an understanding of different economic cycles and their impact on selected investment strategies,” says Topi Piela, who is still engaged in the private banking and asset management group Elite Alfred Berg as a director in its board.

Before taking charge at Yleisradion eläkesäätiö from its long-term CEO Harri Lemmetti, Topi Piela was a member of the pension funds investment committee for almost a decade. Nevertheless, he says the regulatory burden came as a surprise to him when he first took on the job. “One of the biggest surprises for me was the extent of the regulation we needed to adhere to. Especially IORP II [the EU occupational pensions directive] and EIOPA’s expectations on oversight and governance kept me busy for the first couple of months,” he says.

But getting on top of the regulatory side of things has not been the only key task for Topi Piela to deal with. He has also had to navigate the pension fund during the market turbulence this spring. However, he notes that the spring market crash did not cause as much destruction as its predecessors, mostly due to the preparedness of the central banks and governments. “The spring market crisis was short lived. The sharp decline and even sharper recovery of the stock market surprised everyone and, as I understand, only few players really managed to react in any significant way before it was all over. Unlike in 2008, this one didn’t spread to an all-out financial crisis, which is largely thanks to the massive stimulus packages from the central banks and governments. Their actions really came to the rescue of the financial markets, which has been a huge relief,” he says.

The pension fund’s investment team worked throughout the crisis on tweaking the portfolio. “Having lived through previous crises, we immediately focused on our liquidity and the possibility of it drying up. To prevent that, we sold assets, even some of our money-market investment funds, to keep our liquidity going. We also tried to take advantage of the market situation and added investments in equities,” Topi Piela comments. The plan was to increase the weighting in equities at several different points in time but the sharp rise of the stock market prevented the team from pursuing that strategy past the second quarter. “So we ended up selling some of the equities we bought at the beginning of the stock market slump and decreased the overall equity weighting in our portfolio,” he explains.

Looking ahead, Topi Piela sees opportunities to potentially add some more risky assets. “We believe we’re going to see a few risk-off periods during the second half of the year that would provide opportunities to add risk. In those cases, we will be looking at private equity, private debt, credit and equities,” he says, noting that the pension fund currently has a slight underweight in equities due to the manoeuvring over the second quarter.

Going forward, the pension fund’s team will continue to have the option to work from home alongside coming into the office. “We want to make sure that we’re well prepared if similar situations arise in the future,” he says, noting that the new working-from-home arrangement has actually increased the efficiency of the team alongside overall job satisfaction.