Cassie Boll Portfolio Manager, Minnesota State Board of Investment St. Paul, Minnesota Art by Iris Lei
Cassie Boll

“Cassie is a highly motivated, analytical and easy-going self-starter. She has been instrumental in the development of our private credit portfolio and a very collaborative contributor to broadening our alternatives investment program. Cassie’s a team player who is willing to accept challenging assignments and strives to foster practical solutions. Her ability to bring a portfolio manager’s perspective enhances our overall asset allocation decisions.” 

—Mansco Perry III, Executive Director and CIO, Minnesota State Board of Investment

Cassie Boll, CFA, is a distinguished portfolio manager at the Minnesota State Board of Investment, where she works on the institution’s due diligence for alternative assets, including private equity, private debt, natural resources, and real estate. She has over 10 years of experience building and maintaining a wealth of strong relationships that have proved fruitful for the investment manager.

Boll sees the dwindling of the current economic cycle as an investment opportunity, despite the popular consensus that opportunities are few and far between. Time is of the essence in her mind, and investors need to act quickly if they want to take advantage of the rare types of opportunities that typically only appear at this stage of the cycle.

Prior to working with Minnesota, she worked as a fixed income trader at Wells Fargo for over 10 years, and her position at Minnesota evolved over time as she proved herself and gained new responsibilities. Boll discusses with CIO how Minnesota is best tackling the market at the end of the economic cycle, and her most prominent accomplishments that led her to where she is today.

CIO: What makes 2019 an interesting investing climate? How are you handling it?

Boll: I have been working to diversify the Minnesota State Board of Investment (SBI) credit portfolio, and it is an interesting time to add higher return-seeking credit strategies. There has been a great proliferation of credit strategies these last few years. As the demand for higher-returning credit strategies has grown, so have the number of products that have come to the market. Strategies that may have looked attractive when they first appeared can now look overcrowded, offering lower returns. 

Being at the end of a credit cycle does not make this an easy task. When spreads are at their lows, it makes the justification for adding credit strategies difficult. On the other hand, we have been at the end of this credit cycle for a few years now. The longer we sit on the sidelines and wait for spreads to widen out, the longer we miss out on higher-income-producing returns.  

We have been handling the current climate by being slow and deliberate with what we have added to the portfolio. Most of which has been on the private credit side as we continue to evaluate and find creative solutions to the public side of the credit markets. 

After this year, what are the largest opportunities and the largest threats you see on the horizon? 

Boll: We have been at the end of this current economic cycle for a few years. It has left everyone wondering when the next recession is going to start. There are a number of threats on the horizon that could push the economy in that direction. As I write this, the trade talks with China have fallen apart and we are waiting to hear how they will retaliate with their own tariffs. In the long term, I believe the biggest threat is the growing political divide not only between political parties but also amongst the general population. There are so many concerns such as health care, the environment, pension reform, just to name a few.  If we can’t agree on the problem itself, how do we ever agree on a solution? 

Whenever you are at the end of a credit cycle, opportunities feel scarce, especially within the credit markets. I spend my time looking for strategies that can take advantage of the bouts of volatility we have had in the markets. I have been successful at finding managers that have been able to find pockets of dislocation.

How did you arrive at your current position? And why did you choose this part of the financial services industry? 

Boll: Prior to coming to the SBI, I was a fixed income trader. I was initially hired at the SBI to co-manage two fixed income portfolios. One portfolio was the state’s cash, which is a short-duration portfolio in which managing liquidity and matching cash flows is a priority. The second portfolio was a core fixed income strategy that was benchmarked off the Barclays Aggregate. 

After managing the portfolios for a year, our CIO approached me about taking on an allocator role in the Alternatives area. I will admit that I was a little hesitant about the new role. My entire career up until that point had me involved in the fixed income market on a daily basis. I was unsure if I would like something that removed me from the market. 

Once I was in the alternatives area, it did not take me long to figure out that I really enjoyed research and the alternatives world. All of us on the alternatives team consider ourselves generalists but we each have an area we focus on. I focus on private debt and, in addition to working on the alternatives team, I spend part of my time on research with the public fixed income team. I love that I get to learn all aspects of the credit markets. In addition, I get to be a part of the other areas of the private markets. From an intellectual standpoint, this is a great place to be. I still watch the fixed income market on a daily basis, but have no regrets about moving to an asset allocator role. 

What was the most important strategic allocation of your career?

Boll: The SBI invests on behalf of Minnesota’s teachers, public employees, and state workers.  Because our investments have the potential to impact so many lives, any allocation is the most important strategic allocation of my career. A recent example I worked on with other members of the team was to set up a “Protection Bucket.” This bucket was designed to have a low correlation to the equity markets so that in a downturn, the portfolio would have assets that could still perform well. Initially, we looked at different variations of the Treasury Benchmark. The long end of the treasury curve has the largest negative correlation to equities, but using this portion of the curve made us nervous given the low-rate environment and the volatility it would add to the portfolio. We also didn’t feel comfortable with the entire curve, as so much of the benchmark was weighted to the front end of the curve. Ultimately, we decided on a five-year plus benchmark that still gave us a low correlation to equities, in addition to a lower volatility than the back end of the treasury curve. We understand that the correlation between treasuries and equities may change some day, but for now the allocation has worked for us through the last few bouts of volatility.

Tips for money managers who want to work with you, especially what not to do.

Boll: The money manager has to be able to articulate who they are, what they do, and how they do it. There have been a number of meetings from which I have walked away confused on the manager’s philosophy or how they planned to execute it. The money manager also needs to provide transparency. It is always frustrating to me when I have to ask the same question more than once before I get a clear and direct answer. My feeling is that if you are not willing to provide transparency in our initial discussions, I am more than likely not going to get the transparency I need further down the road. 

Biggest goof a money manager has made with you? 

Boll: Our team took an initial meeting with a money manager who had reached out to us. There were four or five people across the table from us, one of whom clearly did not want to be there. This individual would sigh loudly whenever our team posed a question and he was clearly more engaged with a text conversation on his phone than the meeting. Other bad behavior included turning to face the window to stare outside for extended stretches and putting his feet up on the conference room table. Our team walked out of the room at the end of the meeting wondering what just happened. Perhaps just as confusing was the money manager follow-up call a few weeks later requesting another meeting. We declined the request telling them we didn’t appreciate the behavior demonstrated previously. The money manager claimed to have no idea what we meant and commented that they had thought the meeting went well. Needless to say, we would never take another meeting with this manager or individual. 

Who in the financial world would you like to have lunch with and why? 

Boll: I work for one of the largest asset managers. We have so many people who are accessible to us with a simple phone call. From my viewpoint, this is one of the best aspects of my job. I have been able to meet so many amazing people both on the asset management side as well as from the asset allocator side. Not only do I get to meet them, but I generally get to spend hours sitting across a table from them discussing their firms, investment strategies, and philosophies. 

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

Boll: We ask each of our outside managers that we now hire what they are doing to promote diversity within their organizations. It is clear from our conversations that we are not the first to ask them this question. Almost everyone we have spoken with has put thought into how they can better promote diversity within their organizations. I think it is a great sign that the conversations have been started but I am hoping it continues to move beyond just conversation. It is one thing to hire diverse candidates, it is another thing altogether to foster a culture that encourages them to stay and grow. I am hopeful we will see changes in the next 10 years that allow for more diversity in organizations at all levels.

What are your hobbies not correlated to work?

Boll: Hobbies? What are those? I have two elementary school-aged children. They are both in activities that keep me busy most days. I have a fitness class that I love attending. In order to fit this in, I get up at 4:20 a.m. to attend a 5 a.m. class. Someday my kids will be grown and will not need me to watch them at their games or shuttle them around. Someday I may have hobbies again but for right now, I consider myself lucky to have happy, healthy kids who are able to participate in activities. 

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