Ashley Baum Senior Investment Manager, Teacher Retirement System of Texas
Ashley Baum
(Art by Victor Juhasz)

“Ashley has done an incredible job in her roles here at TRS. We are so proud that she is getting recognized for her contributions and for her talent.  She has been the person you want on your team.  She always raises her hand for every task, project, learning opportunity, or investment idea. She does an outstanding job at everything she undertakes, and she undertakes a lot of tasks.  She exemplifies our mission of serving the 1.5 million Texans we work for by achieving extraordinary results.”

—Jerry Albright, CIO, Texas Teachers


Ashley Baum was given the opportunity to become an entrepreneur inside of one of the largest pension funds in the United States. In launching the “Special Opportunities Group” inside of the Teacher Retirement System of Texas’ $150 billion pension system, Baum started by testing her new investment concepts without target allocations, then built a team and took it to the “norming stage” within five years, so far investing $1.2 billion. Now she’s seeking to grow her team, increase diversity, and question everything as she tackles the intellectual challenge of being an asset owner.

Baum came to Texas Teachers at the request of then-CIO Britt Harris, who coaxed her to return home to her native state. Baum spent the early portion of her career at PricewaterhouseCoopers and the Financial Accounting Standards Board.  Baum is a CFA charterholder and a CPA.


CIO: What are the accomplishments you are most happy to have achieved recently, and why?

Baum: Reaching the “norming stage” with the Special Opportunities Group I founded in 2013. Five years ago, I effectively became an entrepreneur inside Texas Teachers by proposing an entirely new investment concept and focus. From zero assets, one person, and a test phase, we have now proven it works and expanded significantly in assets, coverage, and people.

Our goal is to look at investments that the Trust might otherwise miss—two big areas for us are public market/hedge fund co-investments and illiquid credit. One unique aspect of our group is that we do not have a target allocation, so each investment we propose must be compelling individually and when considered against its funding source (i.e., what the Trust sells).

Over the last five years, we have invested $1.2 billion and have performed much better than our target returns. We anticipate this area to grow to $3 billion to 4 billion in the next few years.

I believe that we have just scratched the surface with ways to add value to our beneficiaries and I am excited as we continue to innovate and evolve.


CIO: What would you be most excited to accomplish in the year ahead, and why?

Baum: As Special Opportunities is now established and its strategy is proven, this year I am turning to focus on developing the team—we have added three new investors within eight months. I would love to exit 2018 with all the members of my team in position to contribute fresh investment ideas and expand the creativity of this portfolio for TRS.


CIO: What’s the most rewarding aspect of being an asset owner?

Baum: The intellectual challenge—it is a complicated, intertwined, and constantly shifting puzzle to tackle. As an asset owner, you decide which puzzle pieces to use and how to put them together. My grandmother used to complete a puzzle and then immediately glue it together and hang it on the wall—in our business, there is no glue and the puzzle is never complete.

We are always trying to improve the picture and at the same time, the puzzle pieces shift on you. More pieces become available daily, some disappear, not to mention you can decide to change the dimensions of the puzzle or the picture itself. I’m stretching this analogy but the puzzle is never done and I think that is exciting.


CIO: What’s the most challenging?

Baum: Time. With fluid investment boundaries and my natural curiosity, I have to exercise discipline to balance constructing the strategy, developing the team, and prioritizing the best ideas.


CIO: What are you most hopeful about in the future of the industry?

Baum: The democratization of information, an embrace of technology, and more inclusive education systems resulting in an explosion of new ideas, business models, and improved beneficiary/mission outcomes.


CIO: What are you most cautious about?

Baum: Intentional and unintentional biases leading to a stagnant investment industry. Groupthink. Effective oligarchy in certain asset classes by large firms.


CIO: As a leader, what are the most important aspects of the industry you hope to change over your career?

Baum: Increased diversity of thought and approach. I recognize this is speaking to my own experience, but I believe part of my ability to think outside the box is because I was never trained in the box to begin with.

I have a unique path as an allocator—training as an auditor, starting in accounting standard setting at the FASB, working in Big 4 Transaction Services then moving over to the buy side and working in multiple asset classes for TRS.

At TRS, I’m on my fourth position in 10 years. I worked in private equity, real estate, energy, and infrastructure looking at funds and co-investments during the period when the Trust took its private market assets from 4% to 25% of the Trust. This included the GFC period, which was amazingly educational on many fronts. I then worked directly for our chief investment officer across the entire Trust, working with our senior leaders, consultants, and Trustees.

All those experiences showed me that there was a great opportunity to work across asset classes and explore innovations, new structures, and individual opportunities. Today most of my key partners are credit or hedge funds. Bringing an open mind and thinking about how to create new areas of value in a risk-aware way is what I believe differentiates investors. I hope over the course of my career we learn to be agnostic to the source of ideas and welcome all diversity of thought in order to break down silos.


CIO: If you had one piece of advice for your peers, what would it be?

Baum: Question everything, deeply think about the answers, take smart risk, and play the long game.


CIO: What are the biggest current trends you are seeing that have surprised you?

Baum: The lack of (even quiet) accountability from large institutional holders over diversity on boards, executive pay, poor governance, etc. I am concerned this will be compounded by the rise in passive and quantitative strategies which will only further distance the principals from the owners in public firms.

There is a lot of gloom about how passive investments and quant are going to spike volatility and lead to a massive market correction at some point—but not much I’ve specifically heard forecasting how this would transmit through market mechanisms. We don’t really know the impact but we should be very aware this is a risk.