In this discussion, CalSTRS Chief Investment Officer Chris Ailman talks about why he thinks corporations need to have separate CEO and chairman roles – and how CalSTRS is pushing companies to divide those roles.
Tag: Chief Investment Officer
Video: CalSTRS CIO On Pros and Cons of Activist Investing
CalSTRS Chief Investment Officer Chris Ailman sat down with Bloomberg TV this week to talk about the pros and cons of activist investing and the difference between “white hat” and “black hat” activist investors.
Also appearing is Columbia Business School Adjunct Professor Fabio Savoldelli.
Video: CalSTRS CIO Talks 2015 Market Expectations, Asset Allocation Changes
CalSTRS chief investment officer Christopher Ailman sat down with Bloomberg TV on Monday morning to talk about the odds of the market returning 8 to 10 percent in 2015, and how CalSTRS might change its asset allocation next year.
Cover photo by Santiago Medem via Flickr CC
San Diego Pension Begins Transition To In-House CIO
The Board of the San Diego County Employees Retirement Association (SDCERA) moved closer on Thursday to firing Salient Partners, the firm that acts as the pension fund’s chief investment officer.
Board members indicated that the firing was all but official, but that the transition to a new CIO still needs to be worked out.
From Bloomberg:
If the San Diego County Employees Retirement Association goes ahead with the proposal, it would mean the end of the fund’s five-year relationship with Houston-based Salient Partners LP, said board member Dianne Jacob, a San Diego County supervisor.
Just two months ago, the board voted 5-4 against firing Salient after some officials criticized the chief investment officer, Lee Partridge, as needlessly risking retiree income through use of futures contracts tied to securities and commodities.
“It sounds like we are going to terminate the contract,” Jacob said yesterday in a board meeting in San Diego. “It’s just a matter of timing and the transition.”
The company remains committed to its work in San Diego, said Chris Moon Ashraf, a spokeswoman for Salient at Jennifer Connelly Public Relations.
“Should the board determine that a change in provider is in the best interest of its members, Salient will work to ensure a smooth and expeditious transition,” she said in a statement.
The pension board directed its staff to set the timing for terminating the contract with Salient. The board didn’t schedule a vote on ending the contract, or take action on hiring an internal investment chief.
SDCERA pays Salient Partners around $8 million a year. Board members have previously indicated that the salary for a new CIO would likely be around $260,000.
Maryland Fund Looking For New CIO
The Maryland State Retirement and Pension System is looking to hire an executive search firm to hire the fund’s next chief investment officer.
The fund has put the Request for Proposal on their website. The document can also be found at the bottom of this post. According to Pensions & Investments, the proposals are due by September 22 at 2 pm Eastern Time.
The fund’s previous CIO, Melissa Moye, left the fund recently to work for the US Treasury Department. Pensions & Investments reported at the time:
[Moye] is leaving at the end of August to become a senior policy adviser with the U.S. Treasury Department’s office of state and local finance. Deputy CIO Robert Burd will serve as acting CIO. The board has not begun the search process yet, spokesman Michael Golden said.
At the Treasury Department, Ms. Moye will focus on public sector pensions for the office, which was created in May to coordinate efforts to oversee developments in state and local financial markets, including public pension fund liabilities. Maryland pension board chairwoman and state Treasurer Nancy Kopp said in a statement that while the board will miss Ms. Moye’s leadership, “we are thrilled with the opportunity Dr. Moye will have to apply her wealth of knowledge and experience at the national policy level.”
Ms. Moye became CIO in September 2011 after serving as acting CIO since October 2010. Before that, she was deputy treasurer for financial policy and a trustee of the state pension system. Mr. Burd started with the retirement agency in 2001 as an assistant director of externally managed investments and was named managing director of private markets in 2008.
The RFP:
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Video: CalSTRS CIO On Sticking With Hedge Funds
In the above video, we get to hear the Chief Investment Officer of CalSTRS, Christopher Ailman, weigh in on CalPERS’ decision to divest from hedge funds. The gist: CalPERS did what was right for them, but CalSTRS is sticking with hedge funds.
“CalPERS’ decision does not change our mind or our opinion,” Ailman said during the interview.
CalSTRS made its first hedge fund seed investment earlier this year when it committed $200 million to Legion Partners Asset Management LLC. Bloomberg reported back in May:
CalSTRS, based in Sacramento, California, pledged $200 million to Legion in February and took a 30 percent minority stake, investment officer Philip Larrieu, who oversees the pension’s allocations to activist managers, said in an interview last week at the SkyBridge Alternatives Conference in Las Vegas.
The pension system, which has about $4.6 billion with activist managers including Trian Fund Management LP and Relational Investors LLC, is weighing additional investments in the strategy, especially in managers such as Legion that invest in small- and mid-cap companies. Activist investors take stakes in companies and then push for changes aimed at increasing value.[…]
The pension system will consider additional seed investments for the ability to take minority stakes in funds and early allocations for concessions on fees, according to Larrieu. CalSTRS’ other activists include Blue Harbor Group LP, New Mountain Capital LLC, Starboard Value LP, Cartica Capital LLC and Knight Vinke. CalSTRS commits a minimum of about $100 million to each fund and prefers to be the sole investor in a pool, also known as a fund-of-one structure, Larrieu said.
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