Class of 2017 Forty Under Forty

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Justin Pinckney Deputy Chief Investment Officer, Michelin North America, Inc.
(Greenville, SC) 30
Justin Pinckney
(Art by Marcellus Hall)

I have seen tremendous growth in Justin over the past eight years—and great hunger for investment knowledge. At Michelin he has gained global capital markets experience to accompany his solid fundamentals. His bosses love him.

How have you been a change agent at your organization? What have you done that you’re particularly proud of?

I originated and led a lengthy project to improve the quality of our risk management framework by researching, onboarding, and now utilizing a premier risk system to enhance the plans’ data, modeling, and decision-making.

What is the asset class or investment that keeps you up at night, and why?

Inflation. The markets have become comfortable with the Fed moving at a measured and well-advertised pace, so any divergence from this path has the potential to cause a material change in volatility. A labor supply/demand imbalance, caused by expansionary fiscal policy, immigration reform, and/or stronger economic growth, could lead to accelerating wage growth, causing inflation to rise faster than forecast.

What methodologies have you adopted within your institution?

Improving the structure of Investment Committee meetings. Agendas from the past were focused on performance reporting, whereas today they are more action-and education-oriented. Our team now plans to extend education efforts through quarterly lunch-and-learn events and regular updates on various asset classes.

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

Active, with increasing levels of tracking error the more inefficient the market. Our plans have several relationships that extend beyond 20 years, so it is easy to see the benefits of active management measured on this scale versus the 1-, 3-, 5-year industry focus.

What are the changes you’d like to see the institutional investing community make in 10 years?

Collaboration among asset owners. We all serve a united purpose but generally avoid using a collective approach to sourcing managers, sharing research, discussing best practices, and/or negotiating fees. Pooling resources could help all involved and would likely lead to better outcomes.

Who is a manager you don’t currently work with whose brain you’d like to pick?

Seth Klarman of Baupost Group. He is a conservative and thoughtful investor with a long history of excellent performance, but he rarely communicates his views or positions to the market.

Ideally, where would that meeting take place?

A Red Sox game seems appropriate considering he is a part owner of the team.

What is the software investment tool that helps you most?

Aladdin. The risk system informs decisions small and large, from manager due diligence and optimization, to strategic asset allocation and liability management.

What would improve the relationship between you and managers?

Transparency, particularly from our hedge fund managers. I want to use complete holdings information to better evaluate the firm’s research and decision-making process, not to make it publicly available.

Why did you choose your current path?

My mentor had a distinguished career as an asset owner, and he encouraged me to start on the same path as it would provide a comprehensive overview of the industry, asset classes, and geographies. I could not be happier with the decision. It is an ever-evolving challenge that keeps me eager to start each day.