"I had sufficient self-awareness to realize that there were better mathematicians than me"

Career Path: Frank Velling tells us about his career so far. As of August 1, he joins Pensiondanmark as chief investment strategist.
Photo: Bankinvest PR
Photo: Bankinvest PR

Which career path did you see yourself in when you were young?

As will be seen in my next answer, I settled upon my career path very young. Before this, I was very unclear about which way I should go: for example, whether to study law or study something within science, like my oldest brother, a chemistry engineer.

When did you decide on your current career path?

When I was 17 I took an exchange year in a US high school. I had an exceptionally inspiring and engaged teacher of economics: Mr George Pease. After having had him, there was no doubt that I wanted to study national economy after high school. One of my older brothers had studied a Masters in Economics at the University of Aarhus. And when I wavered a little between university and business college, I went to lectures with him at University. And when I studied mathematics and social sciences at high school, I began to smuggle in some of his books, so my social sciences teacher was surprised to see IS-LM diagrams during high school exams!

When I was finished with the first part of university, I got a student job at Aktiv Børs. Here, I was lucky in many ways. Firstly, I had a really good mentor in my boss, Michael Christensen. He was a monetary policy expert, but he wrote educational texts about the financial markets. Therefore it became very clear to me, how economic theory could be used to analyze financial markets, not least the bond market.

Secondly, I was allowed to get involved in most of the work. I can remember our CEO, Erling S. Pedersen, at one point said to me "the more I let you work with free hands, the more I get out of you." He was completely right about that! After my boss resigned, I began to nearly work full time – while I finished my studies. At that time, the career path was already clear. At this point it also became clear to me that what was interesting to me, was neither economics or financial markets – but the interaction between them: Which economic or political news are relevant to the financial markets? And how do they affect the markets?

Which of your study programs have you used most during your career?

I don't think it is possible to point to individual elements of the education that were landmark, as my subsequent jobs have drawn across a wide range of subjects. Each subject has been important: macroeconomics / monetary theory, statistics, econometrics, financial markets and so forth. But none of the subjects have been able to stand alone, compared to what I wanted in my working life. In general, I think more than any one single subject, it was about the practice we learned, of addressing issues in a systematic way and always questioning theories and social science. To be able to challenge financial questions in a systematic way requires a certain theoretical foundation. In this regard, I must mention econometrics: it was clearly the hardest course at university. But it was also the course, where we really had the opportunity to test the theories in practice – and where it became clear, that how limited the economic theory was in terms of answering socio-economic and financial questions.

Which point in your CV represents the biggest career shift?

That would be my time at Carnegie. I was head of bond analysis, as I had been in my earlier roles. Bond analysis underwent an enormous transformation in these years due to technological development and the internet. This meant, that I used many resources on implementing prepayment models for the Danish obligation market. This was largely a consequence of work carried out by Svend Jakobsen, Carsten Tanggaard and Anders Grosen from ScanRate (and Aarhus Business School). And I had sufficient self-awareness to realize that there were better mathematicians than me!

In addition, I found that the big banks had many more resources for macroeconomic analysis as well as bond and share analysis. Nor did they have a lot of expertise in the interaction between them, and a veritable outpouring of economic analysis was published of which much of it was irrelevant for the financial markets. This was one of the reasons that I began to write daily analysis of economics, politics AND financial markets.

Since then, I have written more than 3000 of these. This was the advantage of being in a relatively small place, with very few bosses. And at one point there was an opportunity at Carnegie, to spread the wings and engage in multi-asset allocation. This occurred for some extremely wealthy individuals, with whom I later joined up to found Wealthmanagement Fondsmæglerselskab (Wealth Management Funding Company). Since then, I have worked with a combination of economics and politics and financial markets. And importantly: I have had a hand on the wheel, as responsible for customer investments. This has helped to sharpen the senses and the focus.

Which industry leader has inspired you the most, career-wise?

I think it is difficult to point to a single person, who has had the largest influence on my career. But as a student of Aarhus University, it was hugely limited which opportunities you could have, in order to gain a study-relevant job. Therefore there is no doubt that it meant a lot that Aktiv Børs at the time hired me as a student assistant. My career path has to an extent been a consequence of long-term planning, than of opportunities which suddenly arose. And I have felt privileged that I have had several jobs where I could meet with some of the world's leading experts in their areas. Besides the value of meeting these experts, I have also appreciated working in cross-disciplinary workplaces. The discipline does not belong to a specific science, and you cannot find forecasts or analyses that would not benefit from a "sanity check" from colleagues or others. That is overall on of the reasons that it was easy to say "yes, please" to PensionDanmark: I have known them for very many years, and I have found that (1) It is a highly well-run pension company (2) there are many competent employees in the investment field (3) it is a comfortable environment, which allows you to undertake professional discussions without having to keep your guard up all the time.

English Edit: Lena Rutkowski

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