Until September 2022, David Holmgren served as the CIO of Hartford HealthCare, amassing a superb investment record over 12 years, with an annual average return of 10% over the past five and 9.7% for the past 10. For the last decade, he expanded the portfolio to $4.5 billion from $1.5 billion.

Along the way, he also built a record for enhancing diversification. Holmgren, who arrived at HHC from the Connecticut treasurer’s office, where he was principal investment officer, has long been known for his innovative ways. He focused on active management of the portfolio, rather than on index funds. During up markets, Holmgren’s HHC favored undervalued assets. His approach also featured a large commitment to hedge funds.

“I firmly believe our record demonstrates the value-add of active asset management,” he told CIO last year. “These markets are way too risky to be flying on autopilot, and the best way to control market risks is to be actively allocated.”

Holmgren has a strong reputation for his long-term, top-quartile performance record and is often touted as an industry expert on institutional manager selection, asset allocation and risk function design. 

Holmgren’s dedication to the job at HHC was deep. “Being a health-care institution during a pandemic, where financials have been under enormous pressure, the greatest challenge in managing the portfolios has been our needs for liquidity while still needing to earn expected returns,” he says.

Part of his diversification effort was deepening the fund’s commitment to environmental, social and governance precepts. “We aligned our organization’s mission and desired outcomes to that of our portfolio, so various factors such as ESG were useful in creating awareness of risk factors. Our innovations have been around factor analysis and factor inclusion.”

To Holmgren, “ESG can be a risk mitigator,” as seen in Chinese exposures, as he made certain to keep an eye on renewable-oriented investments, which the Beijing government has blessed.

Holmgren boosted the plan’s real asset weights, especially in ESG industries like social infrastructure and renewable power generation, as an economic hedge against inflation.

At HHC, he fostered inclusiveness, and his nine-member team included people from all sexual orientations, genders and races. He had staffers from India, China, Jamaica and Greece. “We wanted to attack complacency,” and diverse viewpoints helped meet that goal, he says.

Holmgren got involved in health care, he says, “as a way of giving back.” When his son was ailing some years ago, he took him to a pediatrician, who did not just give him a cursory look; the physician discovered an undetected tumor under his ribcage. Not all people are so fortunate to have such good care, he reasons.

Thus, Holmgren saw making the Hartford medical system financially sound as one more means of making quality medicine a reality.

—Larry Light