In size alone, the dean of the American public pension investing space is inevitably the CIO of the California Public Employees’ Retirement System (CalPERS). In early May, the fund announced it had hired Korn/Ferry to lead the search for the late Joe Dear’s successor, and set off a minor feeding frenzy of rumor-mongering and gossip across the industry.
“Who do you think will be the next CIO? We need to find out before October—that’s when the Power 100 ranking comes out,” one Chief Investment Officer (CIO) reporter recently asked.
“No idea. California—odd place,” said another.
“Let’s just do an entirely unscientific poll,” a third commented. “At the very least, we’ll see who is lobbying for themselves.”
So we did just that. Due to our lack of vision, the survey options were limited: The leaders of other large American public pensions, an endowment chief or two, and, in the lone instance of ingenuity, “combining it with California State Teachers’ Retirement System under CIO Chris Ailman.” The big winners soon emerged, with the obvious candidates leading the way. Jay Willoughby—the affable chief of the Alaska Permanent Fund—tallied a significant number of votes, as did Texas Teachers’ Britt Harris and Ailman himself. Outgoing Alberta Investment Management Corporation CEO Leo de Bever and Florida’s Ash Williams followed close behind. “Someone from the corporate world”—a truly un-inspirational option provided by the aforementioned editorial team—garnered solid support as well. Wake Forest University’s endowment—errr, Verger Capital Management now, following the early-May spinout—leader Jim Dunn also made an appearance, as did the University of Chicago’s Mark Schmid.
As with any local political campaign, the write-in candidates were the most telling.
“Let’s just do an entirely unscientific poll. At the very least, we’ll see who is lobbying for themselves.”
Australian Future Fund’s David Neal received a number of citations, as did current CalPERS consultant Michael Schlachter of Wilshire Associates, K.C. Howell of the Virginia Retirement System, and Greg Williamson of the BP pension system. The prize for the least interesting—although, for the betting types, the most likely—candidate was current CalPERS interim-CIO Ted Eliopoulos. “Jiohn Skjervcem”—we assume they meant CIO of the Oregon State Treasury John Skjervem—also received exactly one write-in mention.
Of course, the CIO editorial team’s muck-racking missed a more salient issue: Would any of these gentlemen (and yes, all gentlemen, a continued stain on this industry’s tablecloth, which we address in "The Missing Women of Asset Management") actually want the job? American public pension teams struggle valiantly under the governance structures that are imposed upon them (see page 44 for the counter-example, the Canada Pension Plan Investment Board), but the pay hardly compensates for the headaches. As one respondent opined in what was surely the most insightful write-in answer of all: “Nobody deserves that kind of torture.”
—Kip McDaniel