Tim Barrett has mastered the trifecta: He has served as CIO of a public pension plan, a corporate pension program and an endowment. Before taking his current job at the Texas Tech University System, he was at Eastman Kodak and San Bernardino County in California.

The veteran CIO has served the past 10 years at Texas Tech (assets: $1.7 billion). In addition to his broad-ranging experience, Barrett is an ace at sophisticated strategies involving such elements as swaps, hedge funds and portable alpha.

Much like his career path, Barrett is very nimble with his strategic moves. As equities gained after the 2022 market plunge, he added stock exposure, using outside active managers. At the same time, he moved away from All Country World Index swaps into ACWI Quality swaps, which have the strongest balance sheets, and thus performed better. Texas Tech’s use of swaps has piqued the interest of other allocators, who have quizzed it about the stratagem’s mechanics.

Another shift has been toward active managers. Previously, the split had been 70% of assets in portable alpha programs and 30% to active managers. Now the allocation is 50%/50%. Barrett insists active managers outperform in a time when so many stocks have “been beaten down.” (In portable alpha, there is a division between tracking market returns, aka beta, and seeking alpha, which outperforms market benchmarks.)

Meanwhile, Barrett has increased Treasurys as collateral for the portable alpha effort. The government bonds have boosted cash, as their yields have risen. As a result, the portable alpha program is “more resilient to drawdown risk,” he says. For the year through September, that portfolio was up 14%, compared with half of that if he had stuck to his old mixture.

Lately, Texas Tech has dialed back its equity exposure slightly, increased its use of defensive credit hedge funds and taken out put options to protect itself from big changes in the Federal Reserve’s monetary policy. Plus, Texas Tech has collaborated with Metropolitan Partners Group on asset-backed lending—the assets are commodities whose value is expected to increase over time.

Barrett is big on using small teams to tackle specific tasks. As he puts it, “Leading small teams and still achieving what much larger organizations achieve is likely a skill that may be useful to others, as well as being innovative and tactical in our investment approach.”

—Larry Light