CalPERS Names Stephen Gilmore as New CIO | Chief Investment Officer

The California Public Employees’ Retirement System, the largest pension fund in the U.S. with $494.6 billion in assets, has selected Stephen Gilmore as its new CIO, succeeding Nicole Musicco, who stepped down in September 2023.

Gilmore’s appointment is effective in July, the CalPERS board announced Tuesday. He will become CalPERS’ fourth CIO in slightly more than five years, succeeding Nicole Musicco, Ben Meng and Ted Eliopoulos.

“Stephen has worked in very public roles during his career for organizations where transparency and resiliency are essential,” said CalPERS CEO Marcie Frost in a statement. “He brings not only a wealth of investing knowledge to the job, but he also has the temperament to understand the needs of our members and public sector employers who depend on CalPERS to be a steady, long-term partner.”

Gilmore, who is a member of the CIO Power 100 list of the world’s leading asset allocators, will be leaving his role as CIO of the Guardians of New Zealand Superannuation, which manages the New Zealand Superannuation Fund, a position he has held since 2019. A native of New Zealand, he was previously chief investment strategist at the Future Fund, the sovereign wealth fund of Australia, and has held roles with the International Monetary Fund and several banks, including Morgan Stanley, Chase Manhattan and the Bank of New Zealand.

CalPERS and the role of CIO at the fund has often been referred to as highly political, in which the incumbent must navigate entanglements with the state legislature and a 13-person board of member-elected and political appointees. Comparatively, strong governance is a major belief of NZ Super, which on its website says that “clear governance and decision-making structures that promote efficiency and accountability are effective and add value to the fund.”

As of February 29, NZ Super, the sovereign wealth fund of New Zealand, which manages NZ$73 billion ($43.53 billion), returned 9.27% over the past five years, roughly corresponding with Gilmore’s tenure. In the past 12 months, the fund has returned 16.04%.

As of June 30, CalPERS had one- and five-year annualized returns of 5.8% and 7.1%, respectively, according to CalPERS’ most recent fiscal year report.

NZ Super holds 43% of its portfolio in global equities, 24% in debt securities, 10% in alternatives, 5% in rural and timber, 4% in New Zealand equities, 4% in private equity, 4% in infrastructure and 4% in property.

Comparatively, CalPERS allocates 45.5% of its portfolio to global equity, 26.1% to fixed income, 13.7% to real assets, 14.3% to private equity, 3.5% to private debt and 3.2% to other asset classes, as of February 29.

“Stephen has made a significant contribution to the sophistication of the NZ Super Fund since he joined us in early 2019, a period during which the Fund has grown by more than $30 billion, nearly doubling in size.” said Paula Steed, NZ Super’s CEO, in a statement. “He has championed the role of new technology in enabling better investment decision-making, brought innovative and disciplined thinking to our investment processes and, as Chair of our responsible investment strategy refresh, has been key to our shift towards a sustainable investment approach. These enduring changes have helped to position us well to manage the ongoing growth in the Fund.”

CalPERS began its search for a new CIO in October 2023, hiring executive search firm Dore Partnership to lead the process. The fund held a first round of interviews in January and a second round in February. According to a published report, there were four finalist candidates, all from outside the organization.

Gilmore’s annual salary, according to CalPERS’ press release, will be $718,750, not including performance bonuses.

Gilmore holds a Bachelor of Commerce and a Master of Commerce in economics from the University of Canterbury in Christchurch, New Zealand.