institutional investment

Missouri Fund Looking For Next Executive Director; Announces Hiring of Search Firm

Missouri’s second-largest public pension fund has hired a firm to search for its next executive director, after its current director announced plans to retire by 2016.

From Pensions & Investments:

Missouri State Employees’ Retirement System. Jefferson City, hired EFL Associates as an executive search firm for its search for an executive director, said Candy Smith, spokeswoman.

The $9.3 billion pension fund issued an RFP in April following Executive Director Gary Findlay’s announcement he plans to retire on Dec. 31, 2015. He joined the pension fund as executive director in 1994.

Ms. Smith said the pension fund plans to finalize the parameters of the executive director position at its Nov. 20 meeting, and that EFL will launch the search next year.

The job description listed on the EFL website reads:

Ideal candidates will have significant leadership experience in a public pension system, financial services organization or other customer service-oriented organization; 5+ years of staff management experience, demonstrated fiscal management, budgeting/planning skills; project management skills related to IT initiatives, experience managing external relationships, including legislative ones; an understanding of actuarial concepts; and working knowledge of institutional investment concepts. For additional information, please click on the link (the Position Title) and email us your resume for Position 7394.

Chicago Fund Looks To Fill New Deputy Executive Director Position

The Chicago Public School Teachers’ Pension & Retirement Fund has created a new “deputy executive director” position and is looking for someone to fill it.

The job listing reads:

DEPUTY EXECUTIVE DIRECTOR RESPONSIBILITIES

The Deputy Executive Director will report to the Executive Director and provide support in leadership of functional departments that support Fund operations. The Deputy Executive Director will be actively involved in strategic planning activities. The Deputy Executive Director will advise the Executive Director, Trustees, and other management personnel regarding operational and planning matters.

Key areas of responsibility will include, but will not be limited to: assuring confidentiality, integrity and availability of information and information systems throughout CTPF; ensuring, along with the CFO, fiscal integrity and proper reporting, including the CAFR and budget preparation; planning/coordinating departmental goals and objectives; workforce planning, hiring, evaluating and developing staff; and monitoring Fund operations for compliance with regulations, internal controls and industry best practices.

[…]

REQUIREMENTS

Viable candidates will have significant leadership experience within a public pension system, financial services organization, or other customer service-oriented organization; solid staff management experience; solid fiscal management, budgeting and planning skills; strong project management skills, specifically related to IT initiatives; experience managing external relationships, including legislative ones; working knowledge of institutional investment concepts; and, an understanding of actuarial concepts. An advanced degree is strongly preferred.

FOR MORE INFORMATION / TO APPLY

For more information, or to apply, contact:

Lorraine Gallick

Research Associate

EFL ASSOCIATES

lgallick@eflassociates.com

According to Pensions & Investments, the fund is looking to fill the position by January 1.

The job listing can be found here.

Is There A Major Problem With the Endowment Model?

Over at Institutional Investor, Ashby Monk has posted a thought-provoking piece on the university endowment model and its shortfalls. An excerpt:

The endowment investment model, which is widespread among university endowments (hence the name), is often flagged as the best-in-class framework for long-term investors. This is an approach to institutional investment that is almost entirely outsourced and seeks to generate high returns through an aggressive orientation toward private equity and other alternative assets. In 2013 the average U.S. endowment had an allocation to alternatives of 47 percent, down from the previous year’s peak of 54 percent but still much higher than a decade before.

The model was pioneered by David Swensen, chief investment officer at Yale University, through the investment policies he implemented at the school’s endowment. Using this model, Swensen managed to generate a remarkable 15 percent internal rate of return over a 20-year stretch leading up to 2007. Because of Yale’s wild success, the endowment model was copied by hundreds (and probably thousands) of other endowments and institutional investors around the world. Although the model remains popular today, some institutional investors now see it as being at odds with long-term investing and perhaps even damaging to the long-term investment challenge.

Here’s why: The success or failure of this model seems to be based on access to top-performing managers, as endowments believe that certain managers can and do deliver alpha (returns above a market benchmark). The institutions that have privileged access to top managers see themselves as lucky passengers on an investment return rocket ship powered by hedge funds, private equity firms and other alternative managers.

So most (though not all) endowments won’t do anything to rock the boat with these managers. Thanks to this fear of restricted access, the asset managers would seem to hold the power to discipline and influence asset owners. It’s for this reason that many university endowments are more secretive than the most-secretive sovereign wealth funds. They are protecting their external asset managers from scrutiny. In addition, they are protecting themselves from having to inform their stakeholders about how much they are paying in fees (if they even know what they’re paying managers).

And therein lies a fundamental problem with the endowment model: The agents seem to be in charge of the principals.

Read the full piece here.

Photo by Chaval Brasil