2019 Industry Innovation Awards

Public Defined Benefit Above $100 Billion

Florida State Board of Administration

Ash Williams, Chief Investment Officer
Ash Williams
Art by Nigel Buchanan

2019 CIO of the Year

When you talk to allocators about chief investment officers they admire, Ash Williams comes up frequently. He’s known for being an innovator in the field as well as a thought leader and mentor. For the past 11 years, he’s served as the CIO for Florida’s State Board of Administration, which oversees the Florida Retirement System Trust Fund and several other mandates. This is Williams’ second tour of duty at Florida SBA—he was executive director from 1991-96—and doubled SBA’s assets under management both times. He’s been able to do that by building out an investment team that has deep expertise across asset classes and by acting as a proactive and responsive counterparty in deals with external partners. He says that the breadth and depth of SBA’s portfolio gives the investment team a unique opportunity to innovate and also collaborate with peers—a busy mix that has kept him engaged.
“I’m one of those kinds of people who like to dive in, learn all the details, and then go on to something else,” Williams says. “With a portfolio the size of ours, I can do 10 different things a day and still have room to run.”

Ash WIlliams, left, recipient of the 2019 CIO of the Year award with Chris Ailman, the 2018 winner.

And run he does. Williams’ second stint at SBA came at a time when the investment agency was faltering. Over the past 11 years, he’s cleaned up oversight issues, rebuilt the investment team, and turned the SBA into a powerful investor with a reputation for being a counterparty that always closes and always makes its decisions on time. That makes it a standout among its peers and it has turned the investment agency into a hotbed of innovation.

“Our portfolio is global across public and private asset classes and the forward return that AON is modeling for us over the next 15 years is about 6.6%. Florida actuarial return assumption is currently 7.2%, below the national average of 7.25%’ Williams explains. “That means if you’re going to even get close to making that portfolio return assumptions imply, you really have to  be in a lot of things and do so adding value differently from others prudently and productively.”

The engine that powers SBA’s global portfolio is what Williams refers to as the ‘cycle of investment merit.’ The governance framework at SBA gives Williams direct decision-making authority without having to clear each and every decision through a board over several meetings. In practice, that means that members of the investment team know that when they take an opportunity to Williams, they’re going to get a timely answer. External managers and counterparties get the same treatment. As a result, SBA gets better deal flow, better terms, and access to opportunities that might not be available to other investors. The close-knit nature of the team also improves risk management and strategy formation. “It’s just better all the way around because you get more depth and you get more meaning,” Williams says, adding that the cycle also supports the creation of innovative investment solutions that improve outcomes for the portfolio.

The cycle of investment merit has also helped Williams attract and retain talent. Members of SBA’s investment team have come directly from Wall Street firms in part because they’re able to work directly with the CIO to take advantage of opportunities and don’t have to waste time socializing an idea through a long chain of higher-ups. Through the cycle, Florida SBA has emerged as proof that taking a dynamic approach to investment management and innovation can be a path to stability for allocators.

Looking ahead, Williams says he expects the role of the CIO to continue to evolve as the structures governing the retirement landscape change. “Over the next 10 years, more attention will be paid to figuring out how to integrate alternative investments into [defined contribution] structures to improve risk-adjusted returns,” he explains. “Beneficiary education and service will remain priorities. Cybersecurity has emerged as a critical responsibility as well.”

Williams adds that he’s also working on solutions for the low interest/lower yield market environment that is likely to define the next few years. “We’re looking to nontraditional types of investments that generate predictable cash flows independent of financial markets. Examples could be royalties on intellectual property, lease payments on alternative real assets (aircraft, rail cars, ships, etc.), or specialty real estate strategies. We’re also looking at things on the operating side like cash management that are more valuable in this investment environment than they ever have been.”

Bailey McCann

Public Defined Benefit Above $100 Billion Finalists

  1. Teacher Retirement System of Texas
    Jerry Albright
  2. New York State Teachers' Retirement System
    Tom Lee
  3. Canada Pension Plan Investment Board
    Mark Machin
  4. CDPQ
    Michael Sabia
  5. Oregon Investment Council (OPERF)
    John Skjervem
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