“Carrie Green was an analyst in the domestic equity portfolio when I joined TCRS in 2008. She is very impressive, and it did not take long for me to see her underlying potential. She is extremely bright, organized and motivated. As our private equity portfolio grew and expanded, I determined that she would make a great impact as a senior private equity portfolio manager, and I was right. In addition to doing a superior job developing and managing relationships, she also led our effort to install a system to manage our private equity documentation. Carrie could have easily stayed in our private equity team, but we had a need to beef up our public equity portfolio due to retirements, and I asked her to lead that effort. Again, she is doing a great job and has provided critical leadership and process improvements.”
—Michael Brakebill, CIO, Tennessee Consolidated Retirement System
The CIO Editorial Team shared a dozen questions with all our NextGen nominees and asked them each to pick six to answer. Their answers informed our decision to include them as a NextGen. Below are the answers from Carrie Green.
CIO: How are you dealing with rising interest rates and economic uncertainty?
Green: Not to be overly simplistic, but if not for economic uncertainty, my job would not exist. As investors, we are always making educated guesses about an uncertain future. Fortunately, in institutional investing, our time horizons are long, and that allows us to look through near-term uncertainty and focus on long-term trends to guide our decisionmaking. Dealing with rising interest rates is a function of making an educated guess about what interest rates will be over the medium to long term and incorporating those into our existing investment processes. In the short run, we’d all like to be able to take advantage of potential dislocations that may result from this historic rise in rates, but timing those is more luck than skill, and generally enough money is still circulating from various central bank actions that dislocations close more quickly than most investors, even the very good ones, can take advantage of them. So I focus on being ready to capture opportunities but avoid completely changing direction.
CIO: What is the best way to bring more diversity to the financial industry?
Green: I don’t think there is a best way; if we want to improve diversity, we have to use all the ways: (1) starting early, we have to continue to remove stereotypes around math and emphasize the importance of creativity in solving financial puzzles so that we attract more students to the idea of finance as a profession; (2) showing our individual commitment by investing our time in mentorship for those that are considering finance but may not have easy to find role models; and (3) expanding our own creativity around what an ideal resume looks like for a financial professional. For example, on our public equities team, we have had journalism and astronomy majors, as well as engineers. The ability to investigate and tell an investment’s story and understand how to build a good investment process are highly valuable skills that are not taught in any typical finance course but are natural by-products of other areas of study.
CIO: What asset classes offer the best options for avoiding or mitigating drawdown risk in an institutional portfolio?
Green: Starting from today’s interest rate levels, I believe we can expect fixed income to return to its historical role in a portfolio as a ballast for equity drawdowns.
CIO: What roles do AI and large language models have in the future of institutional investing?
Green: Artificial intelligence and large language models will be key drivers of increased productivity in the institutional investing space in the next decade. I believe most investors today would say that their main challenge is not access to information, but the ability to effectively sort and prioritize which information is most useful to their investment case. In today’s iterations, AI and LLM can very effectively provide support in information sorting. Another area in which AI and LLM could be useful is in providing counterpoints to help investors sort reality from bias. AI and LLM still have work to do in reducing their own biases and in improving analysis strength, but I expect a steady movement in that direction that will increase the usefulness of these tools.
CIO: What traditional and/or alternative asset classes do you think are most important for institutional investors, and why?
Green: I’m an optimist and believe that innovation is where all economic growth begins, so I believe institutional portfolios need a reasonable allocation to venture capital. If new ideas aren’t funded, then the rest of the investment life cycle that makes up the bulk of institutional investment opportunities does not exist.
CIO: What new skills do you think allocators need to be leaders in the field in the coming decade?
Green: While strategic thinking has always been a strong allocator skill, I believe going forward, we’ll be talking more about systemic thinking as a way of understanding investment opportunities and risks. Strategic thinking is often about cause and effect, while systemic thinking keeps looking for the less obvious relationships and connections. With asset classes being sliced up in “new” ways, such as separating infrastructure from other financing investments, the ability to see the whole of a portfolio’s return and risk characteristics through the lens of the relationships and common characteristics between the underlying investments, rather than just their numerical expected returns and tracking error, will help allocators discern what is truly value-add.
