Let’s take a step back—how I think about the job that I am in. Historically, it has been viewed as an investment manager, but I think of myself as a risk manager—this being partly as a result of spending more than half my career in insurance. It’s about being more risk aware with regards to your liabilities. Coming into this field three and a half years ago, I was struck by the discussion of LDI and whether one should extend bond duration. People were thinking about liabilities, but there was still an investment return motivation behind it. Today, partly as a result of the financial crisis, CIOs are more focused on having a concrete game plan for how they want to extend duration and a strategy for achieving fully funded status. It is really refreshing. The flip side is, if you’re going to increase your fixed-income exposure, typically your expected return is going to drop; depending on how that plays into the corporate side, there can be tension. It’s a question of how to balance issues; this is what CIOs, Treasurers, and CFOs care about.
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