Class of 2017 Forty Under Forty

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Ashley Baum Senior Investment Manager, Teacher Retirement System of Texas
(Austin, Texas) 35
Ashley Baum

She looked at current status, design alternatives, and implication on individual beneficiary outcomes, resulting in funding improvements with no major structural changes.

How have you been a change agent at your organization? What are you particularly proud of?

In my first six years investing at the Trust, I saw many interesting and potentially accretive ideas fall through our traditional silos. I convinced our Investment Committee to create a Special Opportunities sleeve. This is a fundamental tactical asset allocation effort focused on absolute returns based on innovation and market dislocation. We look at a wide variety of investments, including activist equities, distressed sovereign debts, healthcare financing, energy opportunities, hung bank loans, and private lending.

Launching this broad mandate in an investment environment of stretched valuations and a global chase for yield requires discipline, a multi-asset class skill set, and cycle awareness. While we are always looking for a fat pitch, in the meantime we have found unique and asymmetric risk-reward situations. My team and I have successfully deployed $800M over the last four years across 16 investments with 18%+ IRR.

The asset class or investment that keeps you up at night, and why?

Just one? The one thing that has kept me up many nights is the long-run impact of the low/zero interest rates and the implication for returns for institutions and savers.

What methodologies have you adopted within your institution?

The establishment of a consistent valuation framework for all our principal and co-investments across the Trust.

Where do you fall in the passive vs. active debate?

An old economics professor suggested the right answer to any question is always “it depends.” I definitely believe in active management, but you have to be realistic about the likelihood and persistence of alpha in select strategies and geographies.

Changes you’d like to see the institutional investing community make in 10 years?

More open-mindedness to diverse backgrounds, unique perspectives, and alternative manager compensation models.

A manager you don’t currently work with whose brain you’d like to pick?

Paul Singer at Elliott—I admire the firm’s courage in making long-term and contrarian, even controversial, stances that they stick to with rigor. I would love to better understand how they decide to take risk.

Ideally, where would that meeting take place?

Lunch at the Modern.

Software investment tool that helps you most?

Excel and Bloomberg.

What would improve the relationship between you and managers?

Mutual appreciation and openness. The sooner we can get down to brass tacks, the more we can do together.

Why did you choose your current path?

Working directly for our CIO (Britt Harris) for over two years showed me what it takes to be a valuable CIO—intellectual curiosity, authenticity, an ability to think at 300,000 feet and 5,000 feet simultaneously, and a knowledge base in all major investment areas. I intentionally chose to train myself as a generalist because I believe that cross-asset class knowledge is extremely valuable, somewhat rare, and results in a differentiated approach.

My current role requires multi-asset skills; in addition to an accounting and M&A consulting background, I led our last Strategic Asset Allocation Study, the annual Investment Policy Review and spent several years allocating capital to private equity, real estate, real assets, and distressed and private credit. Those experiences provide me a unique ability to evaluate many types of investments, be innovative, and always think from a total fund perspective.