Hedge funds are a unique and often misunderstood part of the financial world, known for their sophisticated investment strategies and the allure of high returns. While hedge funds have traditionally been associated with exclusive clientele and secretive operations, the reality is far more complex and nuanced. This article explores the fundamental aspects of hedge funds, the strategies they use, the roles they offer, and the skills required to succeed in this competitive industry. What Are Hedge Funds? In short, hedge funds are specialized investment vehicles that use a wide range of strategies to generate high returns while managing risk. Hedge funds obtain their capital from accredited investors, such as high-net-worth individuals and institutions. Unlike traditional mutual funds, hedge funds have far greater flexibility in their investments and are less bound by regulations. They can invest in a larger set of different assets including equities, bonds, derivatives, currencies, commodities and more, all while using leverage if desired. Hedge funds aim to generate superior risk-adjusted returns, often seeking to outperform traditional benchmarks like the S&P500 or to outperform other investment vehicles like mutual funds. They take advantage of market inefficiencies, economic shifts, and impacting corporate events. The industry thrives on innovation, and the strategies used by hedge funds are as diverse as the assets they invest in. Key Hedge Fund Strategies Hedge funds distinguish themselves through their unique and often complex investment strategies. Each fund typically specializes in one or more strategies to achieve its goals. Some of the most common hedge fund strategies include: – Long/Short Equity: This is perhaps the most well-known hedge fund strategy, where the fund takes long positions in stocks they believe will increase in value and short positions in stocks they expect to decline. This could even be done with stocks within an industry, such as long Tesla and short GM, or between a set of pharmaceutical firms. The goal is to profit from both rising and falling stock prices, or profiting from the spreads between two or more stock prices, offering flexibility across different market conditions. – Global Macro: This strategy capitalizes on large-scale macroeconomic trends by investing across various asset classes, such as stocks, bonds, currencies, and commodities. Fund managers employing this strategy analyses global economic conditions, geopolitical events, follow macroeconomic indicators, follow central bank statements (“FED watchers”) and market trends to make their investment decisions. – Event-Driven: Event-driven strategies focus on specific corporate events, such as mergers, acquisitions, bankruptcies, or restructurings. These funds aim to capitalize on pricing inefficiencies that arise during these corporate events. For instance, a fund might take a long (or short) position in a company that is acquiring another firm, expecting the stock price to rise (or fall) after the acquisition is finalized. – Quantitative (Quant): Quantitative strategies, often referred to as “quant” strategies, are based on mathematical models and algorithms to identify market inefficiencies and trading opportunities. These strategies are created by using large datasets (e.g. data on asset price or volatility over time) and modelled using advanced computational techniques, and they can be (partially) automated. Quant funds are known for their data-driven approach and the use of the newest methods and technologies. – Arbitrage: Arbitrage strategies seek to exploit price discrepancies between related assets. For example, if a stock is priced differently on two exchanges on different places, the hedge fund might buy the stock on the cheaper exchange and sell it on the more expensive one. This is a relatively low-risk strategy that relies on the convergence of asset prices, expecting prices to revert back to one global price. – Distressed debt: Distressed debt funds invest in the bonds or debt of companies that are experiencing financial distress or are in bankruptcy. The idea is to purchase this debt at a significant discount, with the expectation that the company will recover, and the value of its debt will rise. Each of these strategies comes with its own risk and reward profile, making it crucial for investors and fund managers to align strategies with their risk tolerance and market outlook. Roles in Hedge Funds Within Hedge funds there are many different roles for professionals, each playing a different role in the fund’s overall operations. From portfolio managers to quantitative analysts, each role brings specialized expertise to the table. – Portfolio Manager: The portfolio manager is responsible for the fund’s overall investment strategy and decision-making. They analyse market trends, economic data, and investment opportunities to allocate the fund’s capital. Their decisions directly impact the performance and risk profile of the fund. A successful portfolio manager needs a deep understanding of the markets, strong analytical skills, and the ability to adjust strategies whenever market conditions change. – Research Analyst: Research analysts are tasked with conducting detailed research on potential investment opportunities. They analyse financial statements, industry trends, macroeconomic data, and competitive landscapes to support the fund’s investment decisions. Their insights help portfolio managers make informed choices about which assets to buy or sell. Strong analytical abilities and attention to detail are essential for this role. – Quantitative Analyst (Quant): Quantitative analysts, or quants, are the brains behind the algorithms that drive many hedge fund strategies. They use mathematical models to analyse financial data and develop trading strategies. A quant’s day might involve programming algorithms, back testing trading models, or refining existing strategies based on market data. Strong programming skills, a solid foundation in mathematics and statistics, and an understanding of financial markets are crucial for success in this role. – Trader: Hedge fund traders are responsible for executing buy and sell orders based on the fund’s investment strategy. They work closely with portfolio managers to ensure that trades are executed at the right time and price, often under tight time constraints. Traders must stay on top of market movements, monitor liquidity, and make quick decisions. The role requires strong market knowledge, quick thinking, and the ability to manage risk effectively. – Risk Manager: Risk managers monitor and manage the risks associated with the fund’s positions and strategies. They
The Evolving Landscape of Financial Management in Startups: From Intuition to Data-Driven Decision-Making
Traditionally, startup financial management has largely been an exercise in intuition and adaptability. Founders often rely on their gut instincts to make financial decisions, navigating an uncertain, fast-paced environment with limited resources. While this approach can work in the early stages, as startups scale, the complexity of financial management grows exponentially. Cash flow management, budgeting, and forecasting are crucial, not just for survival but also for long-term growth. As startups raise capital, they must also balance the expectations of investors with the demands of day-to-day operations. Despite the importance of financial management, the attention of startup founders is split broadly, where their focus tends to lie on product development and customer acquisition. As a result, financial management has often been reactive—dealing with cash flow shortages or sudden changes in revenue. However, the rise of new tools and technologies is changing this dynamic, reshaping how startups manage their finances and make informed decisions. The Role of Financial Management Platforms In recent years, there has been an explosion in platforms dedicated to helping startups better manage their finances. Tools like Moneybird offer startups the ability to track their spending, forecast cash flow, and even create financial statements. These platforms not only automate financial tasks, freeing up time for founders, but also provide real-time data that allow for more informed decision-making. Startups can now have a clearer picture of their burn rate, runway, and financial health, empowering them to be proactive in managing their resources. One of the most significant developments is the ability for these platforms to integrate with other business tools, like CRMs or payroll software. This integration allows for seamless data flow, reducing errors and inefficiencies that could otherwise lead to costly mistakes. The ability to consolidate various financial data points in one place provides startups with a holistic view of their operations, aiding both short-term decisions and long-term strategic planning. Shifting from Intuition to Data-Driven Decisions As data becomes more accessible, startups are increasingly moving from instinct-driven financial management to a more data-driven approach. Financial dashboards can offer real-time insights into spending patterns, revenue fluctuations, and customer acquisition costs. This shift is crucial as the startup landscape becomes more competitive, and the margin for error shrinks. Inaccurate financial projections can lead to over-investment in areas like marketing or hiring, while underestimating expenses can result in cash flow shortages that cripple growth. One of the critical advantages of data-driven financial management is the ability to model different scenarios. By leveraging predictive analytics, startups can anticipate potential risks and opportunities, allowing them to make better-informed decisions. For example, using historical data, a startup might forecast how a change in product pricing could impact revenue over the next year, or how hiring additional engineers might affect their burn rate. Such insights allow startups to manage risks proactively, rather than reactively addressing financial problems as they arise. Challenges in Startup Financial Management While data-driven financial management holds promise, startups still face several challenges. One of the key issues is that early-stage startups often have limited financial data to work with, making it difficult to generate meaningful insights. In these cases, founders must rely on benchmarks or industry standards, which can be inaccurate or unsuitable for their unique circumstances. Additionally, many startup founders lack formal financial training, which can result in poor decision-making or an over-reliance on external accountants and advisors. Another challenge is the tension between growth and profitability. Many startups, especially those in tech, prioritize rapid expansion over short-term profits. While this approach can lead to explosive growth, it often results in significant cash burn. Startups must strike a delicate balance between investing in growth and maintaining financial stability. This is particularly challenging in sectors where startups need to raise several rounds of funding before reaching profitability. Furthermore, as startups scale, their financial management needs evolve. What worked for a 10-person team may not suffice for a 100-person company. As they grow, startups must implement more robust financial controls, hire dedicated finance teams, and consider external audits to ensure they remain financially healthy and compliant. Opportunities in Financial Management Innovation Despite these challenges, there are tremendous opportunities for startups that embrace modern financial management tools and strategies. One of the biggest opportunities lies in predictive financial modeling. With the rise of machine learning and artificial intelligence, startups can now access tools that help them predict future financial outcomes with greater accuracy. These tools analyze everything from cash flow trends to external market conditions, providing startups with a deeper understanding of their financial future. This can help startups not only in managing their operations but also in securing funding, as investors are increasingly interested in seeing data-backed financial projections. Another emerging trend is the use of fractional CFOs—highly experienced finance professionals who work with multiple startups on a part-time basis. This model allows early-stage startups to benefit from expert financial advice without having to hire a full-time CFO, which can be expensive. Fractional CFOs often bring valuable industry insights and can help startups make strategic decisions about financing, scaling, and managing investor relations. Conclusion In conclusion, financial management in startups is evolving rapidly, moving from a primarily intuition-based approach to one that is increasingly data-driven. Modern financial platforms and tools are providing startups with more accurate, real-time insights, empowering them to make better decisions and mitigate risks. While challenges such as limited data, lack of financial expertise, and the tension between growth and profitability remain, startups that embrace data-driven financial management are better positioned to succeed in today’s competitive landscape. As these tools continue to evolve, the role of financial management will become even more central to a startup’s success. By leveraging data and predictive models, startups can not only improve their financial health but also foster sustainable growth and attract investment, ultimately contributing to a stronger, more resilient startup ecosystem.
GameStop Saga: Unraveling the Dynamics of Short Squeezing and Retail Investor Influence
In early 2021, the financial world witnessed an extraordinary event that not only captured the attention of global audiences but also sparked widespread discussions about the dynamics of stock trading and the evolving influence of retail investors. The meteoric rise in the stock price of GameStop, a video game retailer facing business decline, unfolded through a market phenomenon known as a “short squeeze.” This article delves into the mechanics of short squeezing, examines the GameStop phenomenon, discusses the broader implications for the financial markets, and compares it to another similar event. Understanding Short Squeezing Short squeezing represents a complex but intriguing aspect of the stock market that stems from the practice of short selling. To fully understand short squeezing, it’s essential to delve into the nuances of how short selling works and how it can lead to dramatic shifts in stock prices. This detailed explanation not only demystifies one of the market’s most dramatic phenomena but also equips investors with knowledge of the risks and dynamics involved. The Mechanics of Short Selling Short selling is an investment strategy employed by traders who believe that a stock’s price is going to decrease. Initially, the investor borrows shares of the stock from a broker, committing to return these shares at a later date. Once these shares are borrowed, the investor sells them at the current market price, under the assumption that the stock will soon decline in value. The goal is to repurchase the shares later at a lower price. If the investor’s prediction is correct and the stock price drops, they can buy back the shares at this reduced price, return them to the lender (the broker), and keep the difference in price as profit, minus any fees or interest paid to the broker for the loan of the shares. The Risks of Short Selling The strategy of short selling carries substantial risks, especially if the stock’s price moves contrary to the trader’s expectations. If the stock price begins to rise after the shares have been sold, the potential losses can escalate quickly. Short sellers might be forced to repurchase shares at a higher price to cover their positions and prevent further losses. This scenario can occur due to various factors such as positive news about the company or changes in market sentiment that drive the stock’s price up unexpectedly. The Dynamics of a Short Squeeze A short squeeze happens when the rising price of a stock compels short sellers to buy back shares to cover their positions. This need to buy back shares can happen suddenly and en masse if a significant number of traders need to exit their short positions due to rising prices. The increased buying activity, in turn, drives the price up even further. During a short squeeze, the price of the stock can rise sharply in a very short time, as was notably seen in the GameStop case. The dynamics were intensified by a large number of retail investors and traders on platforms like Reddit who recognized that the stock was heavily shorted. They began buying up shares and options, which reduced the number of available shares and pushed prices up, forcing short sellers to buy back at progressively higher prices to cover their short positions. The GameStop Phenomenon GameStop, a well-known retail chain that once thrived by selling video games and related merchandise, faced significant challenges as the retail landscape evolved. With the advent of digital distribution and shifts in consumer preferences towards online shopping, GameStop’s business model became increasingly unsustainable. By 2020, these challenges had led to a steady decline in sales, casting doubts on the company’s future viability. Amidst these struggles, GameStop caught the attention of institutional investors, who saw the company’s declining fortunes as an opportunity for profit through short selling. Betting on the company’s continued decline, these investors began shorting the stock extensively. By the end of the year, GameStop was among the most shorted stocks in the market, with over 100% of its available shares being borrowed and sold by those betting against it. This overextension in short positions set the stage for a dramatic financial phenomenon. The situation took a surprising turn when users of the Reddit forum r/wallstreetbets started to take notice of GameStop’s heavily shorted status. Many in this online community, comprising mainly retail investors, recognized a unique opportunity to influence the stock’s price. Motivated by a mix of profit potential and a desire to challenge the dominance of institutional investors, they started buying GameStop shares in large quantities. This coordinated buying effort began to drive the stock’s price up rapidly. As the price of GameStop shares started to climb, the pressure on short sellers intensified. The rising prices represented not just unrealized losses but an escalating threat to their financial positions. Hedge funds and other institutional investors who had bet heavily against GameStop found themselves in a precarious situation. The higher the stock went, the more money they lost, creating a sense of urgency to limit losses. Compelled by the mounting financial pressure, these short sellers began to buy back shares to cover their positions. However, since so many shares had been shorted, the demand for GameStop stock sharply increased as these investors scrambled to repurchase them. This surge in buying further accelerated the increase in stock price, creating a feedback loop that drove the price even higher. This dynamic resulted in an explosive increase in GameStop’s stock value, which soared from about $17 per share at the start of January 2021 to nearly $350 per share by the end of the month. The rapid rise was unprecedented and highlighted a significant shift in market dynamics, where retail investors collectively could exert substantial influence over the stock market, challenging established financial institutions. The GameStop saga not only reshaped the fortunes of the company but also sparked a broader discussion about market practices, the power of collective retail investing, and the potential need for regulatory changes. It demonstrated how modern trading platforms and social media could
Passionate about sustainability – Sustainability with Audit & Assurance – Working at Deloitte
‘Developments in the field of sustainability are moving fast. Being part of that, helping clients get ready and making an impact, is something we are truly passionate about’, Sanne Prins, Staff Audit, and Endri Olsen, Junior Manager Audit Advisory at Deloitte, say. They both joined the Sustainability team, a brand new Deloitte team that focusses on accelerating sustainability knowledge within Audit & Assurance. ‘Sustainable businesses are the future.’ ‘Taking the bike to the office, using my own water bottle instead of paper cups, choosing reusable make-up remover pads. In my day to day life I try to live as ‘clean’ as possible’, Sanne (24) explains. ‘Being part of the Sustainability team gives me the opportunity to dive deeper into the topic. I want to help clients, give advice and make colleagues aware.’ Endri (28): ‘Sustainability gets me excited because it is the future of living. By helping clients get ready to be compliant with the sustainability rules of 2023, we can make an impact to the client but also indirectly to their environment. In addition to this, becoming a specialist in sustainability is also interesting from a career development perspective. Your skills will definitely be in high demand, which is valuable to Deloitte and to yourself.’ Like sunshine Endri already signed up with Deloitte South Africa when she was 18 years old. ‘I was driven to study accounting and finance and work at a Big Four company. When I walked into the Deloitte office, it felt completely different than other accounting firms I visited. The environment was light and warm, like sunshine. That ambience made me choose Deloitte’, Endri says with a smile. ‘Throughout my studies Deloitte supported me and gave me so many opportunities. There were lots of networking events, I actually met my current partner at one of these events. After I got my qualification, I went to work at the Boston office in the USA for three months, fully facilitated by Deloitte. I was looked after very well, so I definitely did not want to leave Deloitte. When my partner and I were considering moving to Europe, it made sense for us to work at Deloitte the Netherlands. Again, a great choice. It is truly a family environment.’ ‘At Deloitte you can be who you are, and you can choose the path you want’ So much in common Sanne also started working at Deloitte at a young age. ‘Five years ago, I was looking for an internship. Deloitte felt good to me, just like Endri says. I stayed as a working student, did another internship, and finally started working at Audit. At that moment I also started my (pre)master accountancy at Nyenrode University. I can say that some of my colleagues are also my friends. We have many things in common, like education, age, interests, and the same lifestyle. Outside of work, we regularly meet each other. Everybody is open to help each other out and to connect. It is just a very friendly and at the same time highly professional working environment. I just finished my master thesis of which one of the topics was the ESG score, that measures the environmental, social, and governance performance of a company. It certainly stimulated my interest in sustainability further.’ Interesting issues Endri has been working at Audit Advisory for over two years now. ‘I have been involved in all types of projects my division generally does. I am currently helping a client prepare for an IPO, which includes assistance with the preparation of audited financial statements, getting legal and corporate governance in place and parts of the ESG reporting, which I think is really cool. The future of shopping is online and by being involved in developing their ESG reporting, we can guide the client to do it in a more sustainable way. My work offers interesting issues, interesting business models and interesting business operations. One of the things I always enjoy, is getting to really know the client personnel and working with different Deloitte colleagues on each engagement. The clients learn from us, but we also learn from them and each other.’ Professional kitchen ‘Every client is different’, Sanne says. ‘A hotel, companies in retail, real estate or cosmetics. They all differ. Getting insight into their professional operations is always interesting. Especially when it involves the social side of ESG reporting. How are companies dealing with people, both their employees in the Netherlands and the countries in which the products are produced? Are women rewarded in the same way as men? How many women does the board of a company consist of? I am interested in the company values and hope to bring the right awareness.’ The right add-ons Most Big Four companies offer the same sort of packages, according to Endri. ‘But what Deloitte does really well, is offering the right add-ons. We are taken care of. There is a support structure for women, working from home is very well facilitated, and for expats Deloitte even developed a policy during Covid to work from your home country for a few weeks, just so you can see your family.’ Sanne: ‘Deloitte is a really good employer, that takes people and culture seriously. You can be who you are, and you can choose the path you want. It’s up to you which opportunities you decide to take.’
Investment Night – Venture Capital
Preparation for the eleventh edition of Investment Night began in early September. When we as a committee met for the first time at the beginning of the academic year and had to look for a topic, all kinds of ideas immediately came up regarding ESG. However, we felt that there was so much talk about this topic at this time that there was a fear that this would become just another story. That’s when we started focusing more on other topics that we, as up-and-coming finance professionals, had little to no information about in our education. This actually led us directly to Venture Capital! A very dynamic world that is hardly highlighted in our education and the news institutions. Therefore, this symposium was the ideal evening to learn more about the world of Venture Capital. In short, Venture Capital is a form of financing in which investors put money into start-ups or growing companies with high growth potential. These investors, also known as venture capitalists, provide capital in exchange for a stake in the company. The goal is to help the company grow, increasing the value of the shares and eventually allowing the investors to sell their investment with a profit. Venture Capital is often used by companies within innovative sectors such as technology. However, of course, an event like this depends on its speakers. Our intention was to illuminate the world of Venture Capital from 3 sides. Of course from experts who are Venture Capitalists themselves but also from the side of a company that receives a capital injection from the Venture Capital world. Finally, we looked for an expert who stands above both parties from a larger institution or the party providing capital to the Venture Capitalist. Through our network, we quickly arrived at ECFG, a Venture Capital firm based in Eindhoven. The investment director Leo van Schijndel was eager to share his expertise and share his years of experience. ECFG is right in the middle of the brainport region which means it invests a lot in promising business-to-business sectors such as (high-tech) manufacturing, agrotech and ICT. The second Venture Capitalist was Erwin Saasen who spoke from his experience at ABN-AMRO ventures. He himself is now working for a company that has had an injection from Venture Capital so was able to give a fresh and clear view on the subject from both levels. From the perspective of a company that received an injection from Venture Capital, Qurein Biewenga came to speak about his experience at Lightyear, the solar car manufacturer. He was also able to speak from two perspectives because he went the opposite way and is now fund manager at PhotonDelta where he invests in companies engaged in innovation in the semiconductor industry. The last speaker was already a familiar one from this event: Hans Grönloh. He is a partner at KPMG and came to speak from a more controlling role. With a wealth of experience, he was able to provide more interpretation in how to look at the world of Venture Capital. The evening itself was led by our chairman Johan Doesburg, who led the evening with humor and put fire to the feet of our speakers. He ensured that the conversation never stopped and all facets were highlighted. The event began with a brief introduction of what Venture Capital actually is and how the process works from start to finish. Then the evening was shaped by various statements and questions from the audience. One of these questions was whether the people within the Venture Capital world should be seen as “sharks” or in other words as people who are only interested in money and do not care if a company really benefits from it. This was firmly denied by our experts who claimed that they always have the best interests of the companies at heart and also only invest if they actually believe in the product. This last part came back throughout the evening in the discussion and could be seen as the motto of the experts: only invest in something you believe in! As chairman, I would like to thank the mentioned experts and the day-chairman for their participation. I would also like to thank my fellow committee members Bart Schellekens, Bas Verhagen, Emanuel Willemsen, Martijn Mols, Vincent Metz, Rogier Muller and Isa Brangers for their unconditional commitment to making this great event happen.
Interview Bob Homan – CIO ING
ING is a multinational banking and financial services company headquartered in Amsterdam, Netherlands. It offers a wide range of services including retail and commercial banking, asset management, and insurance. ING is known for its innovative digital banking solutions and operates in numerous countries across Europe, the Americas, and Asia. The company emphasizes sustainability and customer-centric services and holds a strong presence in the global financial sector. What did you study and why? I studied economics in Amsterdam, completing my studies in 1992. After that, I spent a year in the military, which was mandatory at the time. Then I unexpectedly ended up in the investment world. I had little interest in investing initially. The job market was quite weak after military service, but I eventually found a position at Postbank through an employment agency. At that time, investing for individuals was just becoming popular. During this period, there was the KPN share issuance; individual investors received a 2.5 gulden discount on the share compared to institutional parties, making it very popular to subscribe. From that moment on, individual investors started investing massively. I found the work and the subject matter immediately enjoyable and gradually pursued it further. I then worked for an asset manager to really learn what to focus on and subsequently spent nine years at Westland Utrecht. This was already a subsidiary of ING. The work was essentially the same as here: investing customers’ money. I was also the manager of a department; I had several commercial teams under me. Then, 16 years ago, I transitioned to ING. I ended up there thanks to the foundation of the securities custody company of Westland Utrecht. I was on that board, and there was also an ING representative. He mentioned he was looking for someone for a new department. That’s how I ended up there, and I’ve been doing that for 16 years now. The financial content combined with a bit of management is the most interesting combination to me. What does a CIO do at ING? It’s quite difficult to precisely describe what I do in a day. Generally, it looks like this: meetings, determining our investment policy, and exchanging transactions. I’m also on several committees that decide on global asset allocations (stocks vs bonds); one focuses on sectors, another on bonds. Once a month, these come together in a committee that I chair, where decisions are made. Decisions like: “We are now going to invest more in IT stocks.” So, I am very involved in the entire investment process, but also in coordination with Belgium and Luxembourg, with whom we share a department. We have a Benelux asset allocation, the same instruments (the same stocks and bonds to choose from), but we have different portfolios and different managers. I think this is very good because it creates a lot of internal competition. Secondly, it ensures that the sense of responsibility is much greater. We have now centralized ING’s investment policy into one department. Communication is very important in this regard. Every morning, we have a meeting with the department where all private bankers in the Netherlands and the Dutch-speaking part of Belgium can dial in. We discuss all economic developments (inflation figures, etc.). With the analysts, we discuss the figures of the companies in our portfolio. And we discuss whether, based on these figures, we should maintain or sell a position. How do these committees work together across these countries? We have consciously chosen to keep the committees fairly neutral in terms of countries. We have 33 people in the Netherlands, just under 20 in Belgium, and only 5 in Luxembourg. It often strikes me that the Dutch have the loudest voice. You notice that there too. The good thing about the Dutch regarding investing is that we dare to make decisions. In some other countries, people always have good ideas, but then they say, “but it can always go wrong”. Yes, it can always go wrong, but that’s part of investing. But you have to dare to make a decision and go for it. When we were merging, I said I wanted to lead it. No one from Belgium or Luxembourg objected, also because they lack that direct character. What mentality is needed to work at ING? You need assertive characters who really have an opinion on topics, but at the same time, you must be flexible as well. So, assertive but being able to conform to the group. Sometimes I also have a preference regarding approach, but if no one agrees with me, it ultimately stops there, and I won’t push it through on my own. You need to be very assertive but able to conform once a decision is made and communicate that clearly. What skills/values are important as a CIO at ING? I’ve been doing this for quite a while, and what surprises me is that there are few people trying to undermine my position. We also do succession planning here, and for my role, there is actually no one. That’s quite comfortable for me. For my role as an investor, it’s important to be insightful and being able to handle uncertainties well. Unlike other bank products like mortgages, which are fully rational and clear, as an investor, you make decisions that are completely uncertain, and so are the outcomes. Many people find that difficult; those who can handle it well often lack management skills. So, there’s little competition among investors who enjoy managing. Another important factor is strong communication skills and the ability to explain things well to those around you, whether they are customers, employees, or the media. I think those qualities are important in my role. You need assertive characters who really have an opinion on topics, but at the same time, you must be flexible as well. How do you deal with clients when stocks are falling? It depends on our view. If we were very positive and unexpectedly end up in a recession—a recession is actually the only