Interview René Berenschot – Executive Director at Aegon Asset Management

Aegon Asset Management is Aegon’s asset manager and offers a wide range of investment services. The company is committed to sustainable investment solutions and integrates environmental, social and governance considerations into its investment process. Aegon Asset Management has offices in Europe, the US and Asia and employs around 1,200 people. Assets under management and advice amount to around EUR 280 billion. Aegon Asset Management’s clients are mainly pension funds, insurance companies, banks, asset managers, family offices and foundations.

What did you study and how did you come to this choice?

I followed several studies and developed my interest in equity investing as early as secondary school. My choice of study was more or less already made during that school period. I started at Havo and then chose the banking and insurance differentiation at HEAO. After completing that, I entered military service, which was compulsory at the time. After my service, I started applying for jobs and looked for a job in an industry that appealed to me, such as equity investing or asset management. It was a challenging time then and quite difficult to find work. My first job was at Van der Hoop Effektenbank, a bank that no longer exists. There were as many as 1,500 applicants for the position I applied for, and in the end, only two trainees were hired. 

During my career, I did several courses, including the VBA (Association of Investment Analysts) course. That may not be as well-known now, but you probably know the CFA training. The VBA is the Dutch variant, more focused on Dutch/European laws and regulations. CFA is more international and mainly focused on the US. I also studied Business Administration and Financial Law at Erasmus University.

What had you done compared to the other 1,500 men to be chosen?

I don’t think there was anything special about my approach. As they always say, just be yourself. But of course, I prepared well for it. In military service, I was given space and time to conduct job interviews. In the team I was on, all the guys had college or university degrees. They were all applying for jobs and it was not always smooth, but you could learn a lot from each other, for example how to write a good cover letter. That made it easier to get through the first round. After several interviews at different companies, you also became more adept at interviewing 

Did you benefit a lot from the financial law course in your career?

I apply daily what I learned during financial law course. Financial law is about financial supervision, risk management, compliance, and everything around it. It is a good background, especially if you work with clients, but of course, it depends on your interests and the position you hold. If you focus on portfolio management, for example, you might need it a little less.

Would you recommend students to do the CFA? Because in the Master Finance at Tilburg University, you can choose to do a CFA track.

If you really want to go in the direction of asset management, it seems that it is mostly valued in the ‘front office’ (such as portfolio management and similar functions). I can imagine that if you are an accountant working for an asset manager, a CFA is not that relevant. But if your focus is really on the front office, then a VBA or CFA definitely have added value. I remember that for my position at a previous employer, Van Lanschot, it was even mandatory. It was not then a matter of ‘it’s handy if you have it’, but really a requirement that someone had to have a CFA or VBA certification.

What else has your career looked like?

I started at Van der Hoop Effektenbank where I worked for eight years. I held various positions there; started as a trainee, and then you look around a bit in different departments. Then I did analyst work for a short time. After that, I did advisory work for private clients, asset management for institutional clients, and eventually became responsible for asset management for private clients. After that, I joined Kempen Capital Management. Now you have Van Lanschot Kempen, but back then Kempen was still independent. I then joined Van Lanschot. At the time Van Lanschot Kempen took over, I also got an offer to work at BNG Bank in The Hague (Bank Nederlandse Gemeenten).

BNG Bank only provides services to parties serving the public interest such as municipalities, provinces and housing associations. It is one of the largest banks in the Netherlands with a balance sheet total of over €100 billion.

At the time, BNG wanted to start an asset management company. Previously, companies such as Vattenfall (Nuon), Eneco and Essent were mainly owned by municipalities and provinces. Then came the liberalisation wave and those companies had to be sold. And BNG bank knew that market well and so the logical idea arose ”let’s start an asset management company” to manage the funds that became available. Well, I thought that was a very nice challenge and it worked out very nicely. Because from scratch, assets under management have grown to around €6 billion.

Then a.s.r. came along. BNG Bank wanted to return to its core business and divest asset management, whereas a.s.r. wanted to set up asset management for third parties. Because a.s.r. did not yet have the infrastructure in place, BNG Asset Management was bought.

Then at the end of 2022, it was announced that Aegon Netherlands was sold to a.s.r., leaving all of Aegon’s other businesses outside; such as Aegon USA, Aegon Asset Management, etc. Aegon Asset Management has a real ambition to grow further. They invest a lot in new teams, products, services and systems. For example, Aladdin (front office system for portfolio management, risk management etc.) was recently purchased from BlackRock and is currently being implemented. Part of the a.s.r. transaction was that a number of investment teams (and the associated assets under management) were transferred to Aegon Asset Management: mortgages, private debt, and structured investments. Everyone who was directly involved in these services has been transferred to Aegon Asset Management, including me.

Where do you see yourself working in 5 and 10 years?

That’s a good question, I don’t know. But what I do think is that I will be working in asset management. I just really like that, and mainly the business development side. That means having a lot of contact with clients and knowing a lot about the different solutions and services we offer. That remains fascinating. Whether that will be at Aegon or another party, you never know. Anything can happen.

Apart from your career, do you also invest yourself?

Yes, in the past more than nowadays. Investing has been my hobby since childhood, and it still is now. But if you work in this industry, you can’t just invest freely because you may also have inside information. It’s all subject to pretty strict rules. So when I invest now, I do so mainly in ETFs based on dollar cost averaging (periodically investing the same amount), which works very well.

I also do some crowdfunding. Of course, you have to be critical about which projects you fund and also look at the platform you use (platform risk).

We saw that you are Executive Director Institutional Business Development, what are your daily activities?

My main activities are maintaining relationships with clients, fiduciary managers, consultants and prospects, and seeing where we can help them. I do not invest for them, that is done by the portfolio managers. For example, one of the interesting projects we are currently working on is the introduction of a new product called ‘fund financing’.

This type of financing is popular with big banks and it works as follows: private equity funds attract money from investors (e.g. pension funds), so-called limited partners (LPs). Imagine a €10 billion fund, where 10 investors have all committed €1 billion. To start with, the funds incur start-up costs. Then they make an initial investment of, say, €250 million. Then they can make an initial capital call of, say, €30 million per LP, but parties with a €1 billion commitment prefer larger capital calls. In addition, private equity funds are fine with temporarily creating some leverage at fund level. Banks are happy to finance this; excellent security through the commitments serving as collateral and attractive margins.

Our team does the same for our clients. We lend money to private equity parties on their behalf, with the LPs serving as collateral. We are currently in the process of marketing this concept more widely, for example by organising information sessions and publishing articles.

More generally, Aegon Asset Management offers a range of asset management services, with a focus on what we call “alternative fixed income”. We focus mainly on less liquid markets such as mortgage investments, private debt, insured credit and infrastructure debt (sustainable projects such as wind farms and solar panels).

You also have Aegon International. If you were to join Aegon Asset Management in the Netherlands, could you easily work abroad?

Yes, very easily. In the US, for example, we have Transamerica, a large subsidiary of Aegon. The non-Dutch part of Aegon is by far the largest. You are also in a very international environment here. The working language is English and every department employs people who are not originally from the Netherlands. In that respect, it is very diverse and there are many career opportunities in many areas. At Aegon Asset Management in the Netherlands alone, for example, about 350 people work in portfolio management, accounting, marketing, HR, you name it.

What is the importance of data in investing?

Very important, think for example of quantitative investing, portfolio hedging, processing sustainability data, etc. But also think about conducting Asset-Liability studies or how a lifecycle should be invested within a DC scheme. The processing and use of data can no longer be ignored.

What is your take on blockchain and do you see a future in this technology in the world of investing?

This is not Aegon’s official view, but personally this is how I view Bitcoin: it is the first “currency” based on blockchain technology and was created during the 2008 credit crisis. The aim was to create a currency with predictable inflation, independent of central banks, in response to the lost trust in the traditional system. I am sympathetic to that idea, especially for countries where governments and central banks may be more dysfunctional or where payments are less well regulated. In such countries, with high inflation and limited livelihood security, a store of value like Bitcoin can be valuable.

For the vast majority of cryptocurrencies, I expect them to eventually disappear. However, Bitcoin and a few others, such as Ethereum, are likely to have a lasting application.

Bitcoin is not currently a good payment method because of relatively high costs and a relatively slow network, but with the growth of the lightning network (a layer-2 solution over the Bitcoin network), I see real improvement there. It’s not yet optimal, but given the evolution within the network, I wouldn’t be surprised if Bitcoin or an alternative is a mainstream payment method in 20 years.

Furthermore, we see that several central banks are also developing digital currencies, so blockchain is here to stay.

How do asset managers view an allocation in Bitcoin?

In general, I see that they are still very cautious. And I can understand that because of the risks, also in terms of reputation. For Aegon Asset Management’s clients, mostly pension funds and insurers, I don’t see them investing in a currency like Bitcoin any time soon. It is now mainly a market for individuals and speculators. Perhaps in time, it will become commonplace first among family offices or hedge funds.

If you could be your 20-year-old self again, what would you do differently?

The direction remains the same, I enjoy this work. I would have liked to continue studying for longer. I also notice this with my children: one a first-year law student and the other a third-year medical student. They are having the time of their lives. And in retrospect, I would have gone straight to university after one year of HBO. I started studying alongside my work and I still enjoy studying immensely. It’s that I don’t have time, but if I could study one or two days alongside my work now, that would be really nice. I enjoy gaining new knowledge and insights. While working, you also learn a lot, but no longer that steep learning curve you have at the beginning.

So would I do it very differently, no, but I would have taken the step to university sooner.

Do you have any tips for Finance students who want to work at Aegon in the future?

I discussed this with someone from the HR department and they did give some interesting insights. Besides the regular things they look out for, what activities did you do alongside your studies, marksheets, etc., it was indicated that at Aegon Asset Management, for example, they consider it a plus that you live independently at an early age.

After all, if you look at our services, you work at a certain level of knowledge and when you come in here (Aegon, ed.) a certain level is expected. You have this more quickly, for instance, if you have moved out early, as you have experienced more. Then you have already had to make a lot of independent decisions and that contributes to self-development. Another plus, for example, is if you have invested a lot of time and effort in a particular hobby for years. That shows you have a lot of discipline.

Best advice: above all, do lots of side activities and enjoy studying. You might not experience it that way now, but it really is a fun time, especially when you look back on it later.