How have you been a change agent at your organization? What are you particularly proud of?
I am a member of the Global Equity team at CalSTRS. I am particularly proud of my contribution to our risk management process. Reflecting on how our team analyzes risk in our portfolio today compared to when I first started, I think we have significantly improved and I would like to think I had a little to do with that. Aside from process improvements or investments, I am proud of the culture our team has built. I am fortunate to have worked with some great people on the Global Equity team, and we truly care about and look out for another beyond work. I am not sure how many people can say that in our industry.
What is the asset class or investment that keeps you up at night, and why?
I would have to say the asset class that I have focused on for the past nine years, public equities. More specifically, I would say US equities. US equities make up over 30% of our $200 billion fund, and I think most would agree valuations appear extended. With all political bias aside, to the degree that Republicans are unable to deliver on their agenda, I think it is pretty easy to see a pullback from here.
Where do you fall in the passive vs. active debate?
This is a difficult question. The active vs. passive management debate has persisted for decades and will likely continue for decades. Here at CalSTRS, we have conducted several active vs. passive studies over the years, and our equity portfolio continues to maintain allocations to both. Personally, I see the merits in both. However, the more complicated issue is how much to allocate between each style and how your active portfolio should be constructed.
Who is a manager you don’t currently work with whose brain you’d like to pick?
Warren Buffet. No explanation needed.
Ideally, where would that meeting take place?
Omaha, Nebraska. Like everyone else, I have read that he has lived in the same home he purchased in 1958. While I expect his house to look nothing like it did in 1958, I still want to see his home.
What is the software investment tool that helps you most?
FactSet, easily. Just as I find myself checking my smartphone numerous times throughout the day, be it to check my calendar, text message, or to read the latest Facebook post, I find FactSet has become a similar luxury. I utilize FactSet constantly throughout the day, be it to run portfolio attribution on an investment manager, perform risk analysis at the aggregate fund level, or catch up on the most recently reported economic data.
What would improve the relationship between you and managers?
Greater transparency. In our role, we invest in people as much as we invest in a stock or strategy. Transparency builds trust. We only physically see the managers we invest with once or twice each year. Therefore, to the extent that managers can continue to provide greater transparency into the inner workings of their investment process, it will only help build greater trust and longer-lasting relationships, while also giving us greater confidence that we are making the very best decisions for our fund and the many teachers we invest on behalf of.
Why did you choose your current path?
Since I was a kid, math has always been my favorite subject. I went into undergrad focused on Mechanical Engineering and shortly realized it was not what I wanted to pursue. A friend convinced me to take an economics course, which I enjoyed, so I took another. Shortly after, I took my first investments course, earned an internship in private equity at CalPERS, and my path has been clear ever since