Frans Verhaar: Moral clarity inspires me
This interview was originally written in Dutch. This is an English translation.
Persistent, reliable, responsible. Financial Investigator spoke with Frans Verhaar, Managing Director, Head of Continental Europe at bfinance. 'You exist by the grace of customers who see your added value.'
By Lies van Rijssen
'Investing fascinated me even before it became my main focus in my Business Administration studies. An internship took me to a provider of private real estate partnerships for wealthy individuals, who mainly invested in the US. But the real estate world wasn't for me. I switched to ING Investment Management, where I ended up in institutional mandate management. There, I did portfolio management with client responsibility. It was a hybrid position where I implemented the investment policy for institutional clients in their portfolios and was accountable for performance and policy. After a while, I wanted to be closer to the financial action. I became Funding Manager in the Treasury department of ING Insurance. There, I focused on the liability side of the balance sheet: cash management, debt issuance, currency transactions. During that time, I also completed my CFA studies.
Because I wanted to gain international experience, it was a logical next step to move to London. That's how I ended up at bfinance in 2007, just before the financial crisis broke out.
At the time, bfinance was a relatively small but fast-growing investment consultant with an innovative business model that set it apart from the established order. I discovered how large and diverse the playing field of asset managers worldwide is and, as part of our research team, I was involved in projects for pension funds and insurers in the United Kingdom, Canada, Germany and Scandinavia, with activities in virtually all asset classes. The Netherlands was still uncharted territory for bfinance. When they asked me if I wanted to develop that market, I jumped at the chance. Since 2010, I have been responsible for our activities in the Benelux. bfinance now operates in more than 45 countries.
One of the most important developments in the financial sector in recent years, in my opinion, is the enormous increase in complexity for institutional investors. Investments in illiquid markets, real estate, infrastructure, private debt, impact investments. These are now almost mainstream, but they require a completely different approach in terms of selection, monitoring and governance.
The internal apparatus of clients – institutional investors such as pension funds – has also come under considerable pressure due to this complexity. High demands are being placed on transparency, sustainability and accountability. At the same time, pension funds have limited scope for expanding their teams. This combination means that they are asking us for more support, but on their terms: the support must be independent, flexible and results-oriented.
Another major development is the enormous increase in available data, but with it also the need for interpretation. Technology offers enormous opportunities, but without interpretation it quickly becomes noise.
Another important development is increased regulation. Despite the good intentions, including the desire to create more clarity, I often find the effect of this worrying. I see the new frameworks and formats causing a kind of paralysis. Add to this the consolidation in the sector, which has produced enormous organisations. It is striking that this has been at the expense of their agility. Decision-making is slowing down, risks are being managed more through processes than through content, and a disproportionate amount of energy is being spent on compliance and coordination.
Personal growth comes from the sum of the lessons you go through. The most important thing you learn in the process is to reflect.
Sustainability is no longer a separate theme in our work, but an integral part of the investment policy of institutional parties. This is true in Europe and especially in the Netherlands. Its implementation is partly driven by regulation, but often also by the convictions of the supporters or directors.
For me, diversity and inclusion are not ideological goals, but a logical consequence of economic reality. We work in a multidisciplinary way, approach problems from different angles and, as mentioned, have clients in more than 45 countries. Naturally, our colleagues come from many of these countries. That makes our team diverse by nature. In terms of diversity, we reflect our clients. Not because we attach a quota to it, but because we can only remain relevant if our teams understand the playing field well.
The most important insight I have gained in my work is that I must learn from the mistakes I make. Every situation contains a lesson. Sometimes a lesson through success, but usually through friction. Through misjudgement, rushing into things, or waiting too long. And that's fine. Personal growth comes from the sum of the lessons you go through. The most important thing you learn in the process is to reflect. Not only on what you did, but especially on why you did something. What was your motivation? What did you overlook, where did you slip up? Was there miscommunication? What would you do differently next time, without compromising your values, of course? This way of thinking helps me stay sharp, also towards clients. I dare to take the space to recalibrate, adjust, admit that I would have viewed a situation differently with new insights. That is not a weakness, but the essence of professional maturity.
The most important moment in my career so far is twofold. On the one hand, it was my decision to leave the substantive side for the client side. I am extremely analytical and have collected the necessary titles. But I noticed that, in the long run, I didn't get the most energy out of all that baggage. Ultimately, it's about my impact in practice. I need the excitement of a client relationship, the dialogue, the switching and building of trust, the solving of problems when things go wrong, taking responsibility when something doesn't go as hoped.
The other aspect is fairly recent. At the beginning of this year, I was given the opportunity to lead our European team. I had never pursued a management position and did not necessarily see myself as a manager. But after I had previously signed up as a mentor for a new colleague, I noticed how much energy guiding others gives me. The feedback and appreciation, also from the wider team, were valuable and did me good. Apparently, people see me as someone they can rely on. Someone who is sharp, communicates honestly and does not shy away from responsibility. I have come to realise that leadership is not about popularity, but about reliability. My new role gives me a lot of satisfaction. I am no longer just focused on my own business, but now also help others to improve. A new dimension.
My biggest challenge has been being given the responsibility of building up our business in the Benelux. Nobody knew us, we had no track record in the region and no customer base. I feared being seen as just another party exploring the market. Everything we have built since then has actually come about through cold calling: picking up the phone and asking for an appointment. That requires patience, perseverance, a strong belief in your quality and the ability to convey that. Because you exist by the grace of customers who see your added value. You only get one chance to be taken seriously. So every conversation, every proposal, had to be spot on. That was fifteen years ago.
AI offers enormous opportunities, but only for those who are actively preparing now and not waiting for the future to catch up with them.
I am proud of where we are now. We have a solid footprint and good brand awareness. As the advance post in Amsterdam, I built that up with my own hands, with the help of colleagues, of course. We are still growing. This month, we received a wonderful assignment from a Dutch pension fund that we will be assisting with their allocation to impact private debt. But not everything went smoothly; we also lost clients. I was extremely disappointed about that. I asked myself some critical questions and considered what I could have done differently within my sphere of influence.
The transition to my current managerial role, which I had no previous experience with, is also challenging. Listening to feedback, learning, making mistakes, reflecting and improving is my approach here too.
I enjoy reading about economics, philosophy and freedom. It sharpens my mind and helps me test my own principles. When I have free time, I seek peace and quiet. My ideal holiday is simple: hiking in the mountains. Away from the noise, back to basics, nature, few external stimuli, no pressure to perform. Having the space to think and keep seeing the bigger picture.
I draw inspiration from moral clarity. From people with a sharp mind who force me to look at things differently. These can be friends and colleagues, but often also clients and business associates. I strongly believe in the value of independent thinking and oppose conformity for the sake of the group. You have to dare to stand up for something, even if it means going against the grain. Responsibility, freedom, autonomy and clarity motivate me. I like to be in control. I want to make choices based on conviction and bear the consequences, knowing that I can only influence how I act and that that is enough. I am only in control of myself and how I respond to situations. If I can manage that well, my mind can grow.
I will conclude with a call for action on AI. AI interests me greatly, and I am also concerned about it. This technological development will fundamentally change our sector and society. I fear that many people do not realise how profound the impact will be, including in the sector in which we operate. AI will drastically change work processes, data analysis, reporting, customer communication and due diligence. What is still human work today may be supported or taken over by a model tomorrow. What does this mean for future generations? Many certainties will disappear. That thought sometimes keeps me awake at night.
My appeal is not to wait for instructions from above on how to deal with AI. AI is not a thing of the future. AI is here, now, and it is only getting smarter and developing at lightning speed. Therefore, try to integrate AI into virtually everything you do on a daily basis. Those who prepare now are building relevance. Those who wait will soon be left behind. Let us realise that Artificial General Intelligence, the next generation of AI, is smarter than humans. AI can have a destabilising effect, but at the same time, AI can deliver fantastic results. Between the two camps, the doom-mongers and the blind optimists, I am realistically optimistic: AI offers enormous opportunities, but only for those who are actively preparing now and not waiting for the future to catch up with them.'
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Frans Verhaar Frans Verhaar (CFA, CAIA, FRM, FDP) studied business administration and has been working at bfinance since 2007, an international consultancy firm specialising in investment issues for institutional investors. Verhaar has extensive experience in alternative investments, financial risk management, investment analysis and financial data science, among other areas. |