Annual message from our CEO: Forward thinking

Throughout my 30 years at Wellington, one of the hallmarks of the firm has been the ability to continually evolve — to meet the needs of our clients, as well as to motivate our existing talent through continuous growth and opportunity and to attract new and different skill sets to the firm. This evolutionary mindset is part of our culture and, in fact, amid the many challenges brought on by the pandemic over the past two years, I think one of the silver linings has been an even greater willingness to embrace change.

Against this backdrop, I’d like to share a few updates on our business and some of the strategic initiatives we’ve undertaken to ensure that we’re aligned with and ready to support our clients’ goals for years to come.

Evolving our Mission & Purpose

For many years, our Mission statement has read: “We seek to exceed the investment objectives and service expectations of our clients worldwide.” But recently, we sought to tie our mission more explicitly to the missions of our clients and the individuals they serve — the real people who are behind every mandate we manage and will benefit if we do our jobs well, from college students to hospital patients to pensioners (our “purpose”). Most recently, we’ve seen an example of this in the small part we’ve been able to play in supporting the missions of hospitals and other health care institutions during the pandemic. In the years ahead, delivering alpha through active management could play an even larger role in helping our clients achieve their objectives.

With this in mind, we’ve arrived at a simple and more aspirational Mission & Purpose statement: “Drive excellence for clients to positively impact millions of beneficiaries’ lives.”

To pursue our Mission & Purpose, we are leaning into our edge as a firm, which I believe includes our ownership model (an independent private partnership at global scale), our investment model (a globally integrated, research-driven community of boutiques), our client-centric ethos, and our extraordinarily collaborative culture. We are also focused on a number of important shorter-term and longer-term initiatives.

An update on our strategic initiatives

In preparation to become CEO last year, I spent much of my time seeking insight and wisdom on how best to fill the role, from both colleagues and leaders of other companies. One of the key messages was the importance of establishing clear, tangible priorities — or as one CEO put it, “the things you have to get right.”

Year in and year out, our “true north” priorities include delivering investment excellence over time and being a trusted advisor to our clients. Attracting, developing, and recognizing talent in order to identify innovative opportunities, as well as to navigate risks associated with the market environment, is a foundational part of our culture and key to delivering on those priorities over the long term.

In support of our priorities, we establish a set of strategic initiatives each year. I’d like to highlight several of our current initiatives here:

2. Positioning the firm for the future of active management

In many of our conversations, our clients are seeking advice on how to meet their long-term obligations to their beneficiaries amid lower expected market returns. They are increasingly focused on differentiated returns and opportunities in private equity and private debt, alternatives, highly concentrated active strategies, and innovative sustainable investments.

With these changes in mind, we’re continuing to invest in the “future of active management.” At the center of this, we are investing in our core research and portfolio management teams, deepening the research bench, and providing tools and technology to help our investors generate insights in a more complex world. In addition to our efforts in sustainable investing mentioned earlier, we’re also ambitiously expanding our privates offering and building out our liquid alternatives platform. And we’re adding these capabilities in a way that leverages our open, collaborative, and global investment ecosystem across asset classes and sectors.

3. Developing a strategy for sustainable work

There are a variety of ways we’re investing in and supporting our talent, including establishing a new investor development framework. But let me address one particular area that I know many other firms are wrestling with: the future of work.

As a society, we have been going through a once-in-100-years pandemic, and I believe we’re about to go through a once-in-100-years change in how people work. To figure out what that means for our firm, we conducted interviews with clients, consultants, and peers; analyzed external research; engaged in internal interviews and focus groups with colleagues; conducted a firmwide survey with an 80% participation rate; and launched an employee innovation challenge, generating 136 ideas from over 750 participants.

The research reinforced our conviction that the physical office is an important part of work. It’s a place to innovate, collaborate, and enable face-to-face interactions that inspire and energize our community. Being together is critical for our apprenticeship learning model, talent development, and mentorship. However, we also identified complementary benefits of remote work, including focused thinking time and the democratization of voices in a virtual meeting. The past two years also proved that we can operate productively in a remote world while maintaining our strong culture. That’s why we think flexibility is key.

Based on this research and experience, we have begun transitioning to a hybrid work environment where both remote work and the office play a critical role. Our vision is a future where all employees are empowered to work flexibly to drive the best outcomes for our clients. We are transitioning to the hybrid model with the humility to know that we still have much to learn and that the workplace of the future will be dynamic. We also recognize that implications of the pandemic are ongoing and varied across the globe. As we continue to shape our workplace of the future, we will look to our employees to provide input and creative ideas. We are confident about our ability to work together in this new and evolving hybrid work environment, while maintaining our magnetic and collaborative culture — and ultimately delivering investment excellence to our clients and their beneficiaries over the long term.

4. Driving diversity, equity, and inclusion forward

During my CEO listening tour, one CEO spoke about the need for “humanity to be represented in our companies.” I found this to be a very constructive way to look toward a long-term goal. In the financial industry, we are admittedly still very far from that goal. The good news is that I think there’s a growing recognition that there is an opportunity for our industry to make enormous strides forward and that bringing together people with different experience and perspectives leads to better teamwork and better outcomes.

For Wellington, we’re working to both be clear about our vision for DEI in the long term and to be very deliberate about our efforts in the near term. We believe that a diverse workforce, equitable opportunities for all colleagues to reach their potential, and an inclusive culture are critical to achieving our mission. Diverse and inclusive teams can help us generate differentiated insights, strong long-term investment results, and solutions to complex client problems. They support our efforts to attract and develop the next generation of talent globally. And they align with our values and commitment to the communities in which we live and work.

Importantly, this is a journey that many of our clients are on as well, and I know they will hold all of us to higher standards going forward. I believe we can meet those standards and that we collectively need a sense of urgency to do so.

Conclusion

We are excited about these initiatives and their long-term impact on our ability to be a partner in the pursuit of your mission. I would like to thank you for giving us the privilege of managing your assets and assure you that we are committed to maintaining your confidence and trust.

Finally, as we all move into the new year and deal with the recent surge in COVID cases, I hope you and your loved ones stay safe. Having been a health care investor for almost 30 years, I’ve never been more optimistic about the power of science. So, while we still need to be patient and vigilant in the coming months, the progress that’s been made with vaccines and treatments should lead to brighter days ahead.

Wishing you a happy and healthy new year,