Becoming in uential took hard work, self-con dence and the ability to surmount obstacles y B CARYL ANNE FRANCIA
What started as a pursuit of intellectual curiosity has become a taxing but rewarding journey for women leading some of the largest allocators, managers and advisers of capital. Along the way, they’ve enriched the world of institutional investing by creating initiatives to promote inclusiveness, supporting younger
women and diverse candidates, and speaking up at industry events.
But to get to where they are today, many of the 60 women who were named to Pensions & Investments’ 2024 class of In uential Women in Institutional Investing said developing the con dence to speak on their own accomplishments and advocate for others was key to their success.
This year’s honorees are in uential — and not only in regard to the management of capital. As some of them built portfolios to withstand nancial turmoil, members of this year’s class have, too, stayed resilient and confronted
News that co-CIO Ken Leech, the institutional face of Western Asset Management, stepped down late last month under a regulatory cloud will test the patience of clients who have had to stomach patchy performance by the rm in recent years and high level turnover even prior to Leech’s exit.
Some, apparently, have already seen enough.
At an Aug. 27 meeting, the investment
2024 honorees found success through resilience
tough work environments, belittling peers and low self-esteem.
“You have to walk the walk” and “set the example for others” in the of ce as well as the broader industry, Kelly Young said. She rst joined Acadian Asset Management as a relationship manager in 2009 and was tapped to become the rm’s rst female CEO in December 2023.
As one becomes more senior at their organization, especially when taking a position in leadership, acting as a role model is increasingly important because “it helps underline the
committee of the $12.5 billion Chicago Public School Teachers’ Pension & Retirement Fund voted to recommend that its trustees terminate Western’s $550 million core-plus xed-income mandate when the board next meets on Sept. 19. Analysts predict other institutional clients could follow suit, with near-term concerns about a Securities and Exchange Commission investigation being added to the mix.
Longer term, the 34-year veteran’s abrupt departure — amid a stretch of
In this
This year’s winners: Page 12
A message from P&I’s publisher: Page 12 This year’s judges: Page 13
Notable: P&I selects Icon and Lifetime Achievement awards, and celebrates Rising Stars. Pages 14, 30
2024 honorees are champions of diverse, emerging managers. Page 26
For the full report, go to PIonline.com/ influentialwomen2024
Jill Schurtz doesn’t hesitate when outlining what enticed her to join the $146 billion Minnesota State Board of Investment as executive director and CIO two years ago.
For starters, she said her long-tenured predecessors — Mansco Perry III, and before him, Howard Bicker — had been clear about the mission
and purpose. “Integrity and character was rst and foremost. They built a great track record. And then secondly, it didn’t take much to know this is a really great team.’’
GONE: Ken Leech
Hedge Funds
Two Sigma named new co-CEOs to take over for feuding co-founders John Overdeck and David Siegel. Page 6
Influential Women in Institutional Investing
2024’s class is dedicated to helping out diverse and emerging managers. Page 26
Even though they’re early in their careers, Rising Stars are already making a big impact on the industry. Page 30
Of note: P&I selects 2024 Icon and Lifetime Achievement honorees. Page 14
Publisher Nikki Pirrello lauds this year’s honorees. Page 12
Investing
Pension funds are reconsidering their risk strategies as equity and bond correlations have gone topsy-turvy. Page 6
Pension Funds
U.K. Chancellor of the Exchequer Rachel Reeves looked to pick some handy tips from Canadian pension funds. Page 4
Special Report: The Largest Retirement Plans
The annual survey conducted by P&I and the Thinking Ahead Institute had good news: Assets of the world’s top 300 retirement plans increased 10%. Page 42
NFL will take it slow with private equity investors
The National Football League, the premier sports league in the U.S., will allow institutional investors, including private equity rms, to take up to 10% stakes in their teams, after lagging well behind Major League Baseball and the National Basketball Association.
The NFL plans to move slowly on this front — among other things, prospective institutional owners will be limited to at most a 10% stake and at least a 3% stake, and will have to keep their ownership interests for at least six years.
“The NFL is the largest and most pro table sports league worldwide and the last holdout (in) allowing private equity investment,” said Kyle
Walters, associate analyst-private equity at PitchBook, the nancial data and software rm.
Such outside investment can provide NFL team owners with liquidity as some look to cash in on the ever-rising team valuations or fund projects such as building new stadiums, Walters added.
TIAA partnering with Accenture to upgrade record-keeping unit
Modernization push aims to boost ef ciency via automation and enhanced processes
TIAA-CREF is teaming up with Accenture in a bid to modernize its retirement record-keeping business, TIAA announced in a news release Aug. 27.
As part of the strategic partnership, Accenture will support parts of the TIAA’s record-keeping operations to make them more ef cient through automation and enhanced processes, the news release said.
Accenture will begin to provide the support in 2025.
“We are leveraging Accenture as a strategic partner in transforming our record-keeping technology and operations,” said Sastry Durvasula, chief information and client services of cer at TIAA, in an interview. “Being a hundred-year-old company, we continuously work hard to modernize our technology and digital capabilities and drive it to the next level.”
TIAA, however, will continue to “own” the record-keeping platform, client-facing responsibilities and the overall “onus of record-keeping,” he said.
Kourtney Gibson, senior executive vice president and chief institutional client of cer at TIAA, underscored the point, saying that TIAA will retain full responsibility for retirement plans and record-keeping services as well as hosting and safeguarding plan data on its platforms. She also added that TIAA will continue to be responsible for all aspects of relationships with plan sponsors, their employees, and plan consultants.
“When we think about the relationships with our plan sponsors and individual participants, they will start and stop with us,” Gibson said.
TIAA anticipates the partnership will result in new digital capabilities and arti cial intelligence-enabled tools for TIAA relationship managers and plan consultants. It also expects to see new capabilities that will help plan participants create a more secure future through new digital features.
“We are really looking to reimagine how it is that we make doing business with TIAA easier and more enjoyable for the people that we serve,” Gibson said.
As part of the partnership, some 1,500 TIAA employees in the U.S. and India will be moving to Accenture. Half of the employees being offered positions are in the U.S. and the other half in India, Durvasula said, adding that they will primarily support TIAA’s back-end record-keeping operations.
In addition, several senior leaders have been offered and already accepted positions with Accenture.
“We believe this partnership will take our record-keeping capabilities
“Additionally, several owners have most — or all — of their wealth tied up in these franchises, and private equity rms can step in and provide equity in exchange for a small piece of the franchise,” he added.
Patrick Rishe, director of the sports business program at Washington University in St. Louis, thinks
the NFL’s conservative approach to new endeavors re ects the league’s cautious entry into institutional ownership.
“They [the NFL] have had time to speak with the other leagues, their ownership groups, those from the private equity world, and other relevant parties to fully assess the risks and rewards of allowing private equity minority ownership of NFL teams,” he said.
“With average NFL franchise values north of $5.5 billion, the allowance of limited private equity ownership expands the pool of desirable future NFL owners while reducing their nancial risk,” he said.
Shana Orczyk Sissel, founder, president and chief executive of cer of Banríon Capital Management, an alternative asset technology platform which advises clients on alternatives, says alternatives rms have a “massive” interest in pro football teams.
She concurred that the NFL has been among the most conservatively
Jon Clark, state investment of cer for the New Mexico State Investment Council, has a money problem, but not the negative cash ow kind that many public pension plans are facing.
In ows into the sovereign wealth fund totaled $8 billion in calendar year 2023. By comparison, average annual in ows prior to 2018 were about $460 million.
New Mexico’s in ows are so large, they may push the council to become the overseer of the second-largest sovereign wealth fund in the country. The largest is the $78.6 billion Alaska Permanent Fund Corp., Juneau, and New Mexico council assets of $52.4 billion put it neck and neck with the $52.3 billion Texas Permanent School Fund, Austin.
Council assets, in about a dozen funds, are growing rapidly due, in large part, to changes made by the state of New Mexico last year that diverted a bigger portion
of the state’s oil and gas extraction revenues, including from the New Mexico portion of the Permian Basin, to the council to invest.
Council of cials are currently modeling the impact of an estimated $4 billion a year in oil and gas revenues into the funds it manages, Clark said. The council’s 10-year average for oil and gas revenue contributions to the funds prior to 2019 was about $560 million annually. Before the recent legislative change, much of the oil and gas revenue went to the state budget, causing the state’s revenue streams to go through boom-andbust cycles and creating havoc on the state’s budgeting process, said Clark, who before assuming the state investment ofcer post in January had been the deputy cabinet secretary of the New Mexico Economic Development Department.
Now the state will send excess oil and gas revenues from production and
San Bernardino CIO tilts portfolio to income focus
Assets ‘compete’ for allocation based on income generation, not only returns
y B PALASH GHOSH
San Bernardino County (Calif.) Employees’ Retirement Association’s approach to credit investments is somewhat unusual in that they don’t differentiate between public and private credit. Rather, they identify those assets by region (U.S. vs. non-U.S.).
“Differentiating by geography with the various bankruptcy provisions for lenders seems a better demarcation for us rather than the liquidity of a credit instrument,” said Donald Pierce, chief investment of cer.
“That said, we do consider liquidity in that a private bond has to pay more than a liquid alternative all else (being) equal. Moreover, that isn’t necessarily a linear function,” he said. As a pension fund, “the marginal utility of locking up capital if investment-grade public market debt was 8% would be very low. We could satisfy our annual funding need without taking undue risk. As it is, we aren’t there on the investment-grade side as yields are in the mid-to-high 4%.”
When Pierce initially joined SBCERA as an investment analyst in August 2001, the pension fund had $3.4 billion in assets and the investment staff comprised just two people. Now, SBCERA boasts $15.6 billion in assets, seven investment staff members and two administrative staff.
“I started at Watson Wyatt (a predecessor to Willis Towers Watson) as an actuarial analyst working on healthcare and pension plans, later transitioning to an investment analyst position,” he said. “In 2001, my now former boss and mentor (former SBCERA CIO) Tim Barrett was looking to hire an investment analyst, and it was a wonderful opportunity that I couldn’t pass up.”
Pierce was named CIO in 2011 after Barrett departed.
“Philosophically, I was very much in-line with Tim’s approach, so the initial changes when I became CIO were
Hedge funds the latest targets of social media scammers
y B LYDIA TOMKIW
The alert popped up on this reporter’s phone earlier this month: an invitation to join the Telegram group “AQR-7 Crypto Futures Trading.”
Photos of actual senior staff at AQR Capital Management along with a description of the Greenwich, Conn.-based rm and its website address were dropped into the Telegram chat, along with messages saying, “If you want to get rich quick with the Bitcoin market, consult our dedicated Investment Advisor.”
Red ags were immediate, with one group member claiming to be an analyst at ARQ — not AQR. Another offered oneon-one trading guidance with “analysts”
Publicly traded alts managers raking it in
for a 10-30% commission.Telegram is a social media and instant messaging app that lets users create and join groups, send messages as well as share les and photos. But this time, the group chat was a scam. It’s just one example of fraud and hedge fund impersonations taking place across social media using the names of some of the most well-known hedge fund rms and founders in the industry. Investment scams are extremely dif cult to police on social media, but hold the potential to harm real-world investors.Targets of impersonations include AQR, Seth Klarman of Baupost Group, Bill Ackman of Pershing Square Capital Management and
SCAMMERS ON PAGE 49
Auto escalation underachieving, with opt-in cited as biggest thorn
y B ROBERT STEYER
Automatic enrollment encourages more de ned contribution participants to put more money into their accounts. But its auto-escalation cousin remains an underachiever due to a strategy that fails to capitalize on participants’ inertia.
DC plans offer automatic enrollment, allowing participants to opt out of automatically contributing to a retirement account. Thanks to inertia, relatively few retirement plan members drop out, even as plans have increased auto-enrollment deferral rates over the years, researchers and DC consultants say.
Retirement plans offering auto escalation can use the opt-out strategy, or they can tell participants they must opt in. For the latter approach, participant usage is chronically low, according to research by T. Rowe Price of its record-kept clients that offer auto features.
For the opt-in group, participant usage was only 11% last year — an annual rate that has been consistent since 2014, never rising higher than 13% in any year.
By contrast, 61% participated in auto escalation via the opt-out approach last year. Since 2014, the annual peak usage was 67% in 2017 and again in 2018.
“That’s exactly what we have seen in the eld,” said Michael J. Francis, president and co-founder of retirement plan consulting rm Francis LLC. “In reality, opt-in is rarely used.”
Francis recommends DC clients pair auto escalation with auto enrollment and use opt-out for both, adding that 95% of the rm’s clients that auto-enroll participants also feature auto escalation.
Clients who resist the opt-out strategy for auto escalation say it “feels too Big Brother,” said Francis.
Publicly traded money management rms specializing in alternative asset classes have been strong asset gatherers, outpacing more traditional money managers. The companies have also closed large funds over the last few years and appear to be in a good position to bene t as private assets are expected to remain an area of interest to pension funds and other institutional investors.
Impressive growth: Five major publicly traded alts rms have seen hefty AUM increases since the start of 2019. Ares Management and KKR, with 200% and 175% growth, respectively, led the pack. The other 18 managers tracked by Pensions & Investments , which largely have traditional assets, had AUM growth of 43%.
2024 AUM and five-year growth
Blackstone leads: Blackstone’s pension fund mandates since the start of 2019 totaled $42.3 billion, topping the list, based on data collected by P&I . The seven rms’ pension fund hirings have largely been for their private asset funds.
Mandates by year (billions)
Credit dominates: The broad credit asset class made up the largest portion of the companies’ AUM, 47.5%, as of June 30. This was followed by private equity’s approximately 24% and real estate’s roughly 20%.
AUM breakdown
Private fund closings: Since the start of 2019, Blackstone’s private asset fund closings totaled about $148 billion, followed by $106 billion for Ares. Among the various asset classes, private equity fund closings topped the list with $156 billion, followed by $115 billion for private credit.
Fundraising by class, 2019August 2024 (billions)
What the U.K. stands to learn from Canadian funds
said on Aug. 7 that Reeves — just one month into her new role at the helm of the country’s nances — was hosting a roundtable with eight of the largest Canadian public pension funds, the so-called Maple 8, which account for about C$2.21 trillion ($1.6 trillion) in assets.
Canada’s pension funds have long been held up as shining examples of well-run and high-performing plans in the global retirement market, so U.K. Chancellor of the Exchequer Rachel Reeves’ trip last month to Toronto to learn lessons comes as no surprise.
The U.K. new Labour government
These pension funds represent more than half of Canada’s total retirement plan assets, which stood at $3.11 trillion as of Dec. 31, accordleing to the Thinking Ahead Institute’s latest Global Pension Assets Study. That made Canada fourth in the global ranking of retirement markets — one place behind the U.K., with
$3.21 trillion in total.
Forming part of a newly launched retirement review, in which the government set out its intention to “unleash the full investment might of the £360 billion ($467.5 billion) local government pension scheme to make it an engine for U.K. growth,” sources expect the chancellor to bring home lessons on how large, sophisticated pools of capital are deployed into productive assets or real assets, as well as learnings on governance that these Canadian plans are well-known for.
The eight largest public sector pension funds in Canada are often
held up as beacons of sophistication. The “Canadian model” that Reeves is studying is that of a group of pension funds known for direct investing, internal management and excellent governance. It’s also a model where multiple stand-alone public pension funds have been brought together under one governance model and plan by name — British Columbia Investment Management Corp., for example, has C$250.4 billion in assets and runs those investments on behalf of 29 British Columbia public sector clients, while the C$112.6 billion Healthcare of Ontario Pension Plan
is offered by more than 670 participating employers including hospitals and community health centers.
Canada’s other Maple 8 pension funds are: Canada Pension Plan Investments, Toronto (C$632.6 billion) — represented at the roundtable by CEO John Graham; Caisse de Depot et Placement du Quebec, Montreal (C$434 billion), which was in attendance at the roundtable but declined to comment further; Public Sector Pension Investment Board, Montreal (C$264.9 billion), which due to scheduling con icts was unable to participate in the meeting, a spokesperson said; Ontario Teachers’ Pension Plan, Toronto (C$247.5 billion); Alberta Investment Management Corp., Edmonton, with C$160.6 billion; and Ontario Municipal Employees Retirement System, Toronto (C$128.6 billion).
Pension review
The chancellor’s visit to Canada’s Maple 8 is part of the pensions review announced by the new Labour government in July.
Previous governments have made efforts to channel retirement assets into the U.K. economy. In 2015, then-Chancellor of the Exchequer George Osborne announced plans to bring together England and Wales’ local government pension scheme funds into asset pools — eight of which now exist — in order to invest in bigger-ticket items, among other aims such as reducing costs. And one of the last retirement-related moves by the former Conservative government was to launch the Mansion House Compact, an initiative to have U.K. de ned bene t plans and other institutional investors commit up to 5% of their assets to U.K. private equity.
“Fundamentally, in the U.K., what needs to change is the view that security (equals) investing in gilts,” or U.K. government bonds, said Benoit Hudon, CEO and president at Mercer U.K., and himself Canadian-born. “Indeed, when looking at the average funded status of pension schemes around the world, the U.K. compares unfavorably, and this is in large part driven by investment strategies which have too often ignored the bene ts, over time, of investing in growth assets,” such as equities and infrastructure, he said.
This government has “enthusiastically embraced a couple of steps up in the ambition of this sector of the economy doing more win-win things,” Roger Urwin, co-founder of the Thinking Ahead Institute, added. “This is not taking anything from the pension sector — quite the reverse (in) trying to encourage its ef ciency and streamlining — but doing it to bene t the U.K. economy as well. From that point of view, it is quite neat, particularly at a time where net zero and sustainability” are big focuses, he added.
Alternatives focus Canadian plans on average have a higher exposure to alternatives than their U.K. counterparts.
The Thinking Ahead Institute’s study shows a 43% allocation to “other” asset classes — not equities, xed income or cash. U.K. plans, in contrast, have an average just 14% to other asset classes, with xed income instead leading the way.
The use of collective investment trusts in employer-sponsored defined contribution plans is growing — fast. By the end of 2023, 84% of plan sponsors had offered CITs as part of their fund options, with target-date fund strategies driving much of the growth, according to the Callan Institute’s 2023 Defined Contribution Trends Survey.
More plan sponsors are choosing CITs over mutual funds for a number of valid reasons, said Ryan Dargis, senior vice president of service and strategy enablement in Global Fund Services for the Americas at Northern Trust. “It’s driven by efficiency, flexibility and the ability to negotiate costs,” he said.
CITs are tax-exempt investment vehicles that are similar to mutual funds in their implementation but different in their structure and regulation. They have seen rapid adoption in recent years for their flexible structure, streamlined reporting requirements and, often, lower costs and fees. CITs can be integrated into plans easily, customized more readily and accommodate more investment strategies than are typically available in traditional mutual funds.
To provide these benefi ts to a wider number of participants beyond those in 401(k) plans, the DC industry is hopeful it will see full legislative approval for their use in 403(b) plans. In March, an amendment passed in the U.S. House of Representatives, and in August a bipartisan group of senators introduced the Retirement Fairness for Charities and Educational Institutions Act, aimed at clearing the final regulatory hurdle preventing plans sponsored by nonprofi t organizations from using CITs.
TDFs LEAD
THE WAY
The most dramatic growth area for CITs has been within target-date funds, Dargis said. CITs reached 49% of target-date market share at the end of 2023, and it appears that as of June 2024, they have surpassed mutual funds, reaching 50.5% of the market. CITs are “in a healthy growth mode, with more room to grow,” Dargis added, crediting the fact that CITs operate within their own regulatory oversight and governance framework, which is different than mutual funds.
CITs are subject to banking regulations and certain tax and ERISA-related regulations, but unlike mutual funds, they are not regulated by the Securities and Exchange Commission and generally not subject to the Securities Act of 1933 or the Investment Company Act of 1940. “Fewer regulatory oversight requirements translate into less operational complexity to run or set up a CIT,” said Dargis, “although they still maintain a reliable governance structure.” CITs are overseen by a trustee, a sponsoring bank entity, acting in a fiduciary capacity.
Dargis sees custom target-date funds continuing as a key growth area for CITs because more plan sponsors deploy solutions tied to the unique needs and demographics of their participants. According to the Callan survey, only 16% of plan sponsors used their record keeper’s target-date option in 2022, down from 59% a decade ago. “It’s easy to plug and play CITs to branch out from a record keeper’s proprietary fund lineup and customize your own lineup, whether in custom target-date funds or in single strategies that need to fill a hole on the menu.”
Also, if a particular strategy or investment model doesn’t already exist, it can be quicker to launch it as a CIT than as a mutual fund. Because there are fewer legal and regulatory considerations, CIT providers have made fund launches highly efficient turnkey processes with quicker speed to market. “There’s an established way to go to market with CITs, working with investment managers, the plan sponsor and the plan’s consultant or advisors,” Dargis noted.
Many DC plans can deploy CITs through their record keepers using the same operational infrastructure, which creates market efficiencies as well. “The ability of CITs to provide different solutions for different types of plan needs lends itself to a level of flexibility that is attractive to both asset managers and plan sponsors.”
The ability of CITs to provide different solutions for different types of plan needs lends itself to a level of exibility that is attractive to both asset managers and plan sponsors.
WIDER USE CASES
CITs provide an effi cient way for plan sponsors to access the diff erent investment strategies that they want to off er in their plan. For instance, they can be an underlying sleeve in a target-date fund and used in combination with other investment vehicles, such as a managed account. CITs can also stand alone as vehicles for white-label investment strategies.
Plan sponsors can use CITs to add exposure to investments not available in traditional mutual funds, such as certain alternative or stable-value strategies, which could provide additional diversification, Dargis said. “CITs can also bring relatively low-cost active management to participants across various asset classes,” complementing the use of a passive fund.
EFFICIENT PRICING AND TRANSPARENCY
While mutual fund fees have come down in recent years, CITs have an additional advantage beyond efficient pricing. Since they are not restricted by the rules governing mutual funds, in certain cases, plan sponsors, their advisers and consultants have the ability to negotiate fees on CITs.
CITs allow for diff erent fee structures that can be based on asset size and service relationships versus the fi xed asset-based management fees of mutual funds. “Morningstar studied the asset-weighted average expense ratios of mutual funds and CITs in 2020 and found that those of CITs are generally less than half those of their mutual fund counterparts across both active and passive strategies,” Dargis said.
This efficient pricing structure can help address industrywide fee pressures as savings can be passed on to plan sponsors and participants. “The awareness of excessive fee-related litigation, primarily focused on the investments included in the target-date funds of larger DC plans, is another key catalyst driving CIT adoption.”
Over the last decade-plus, CITs have continued to leverage the same technology platforms and market infrastructure that traditional mutual funds use, giving plan sponsors and participants access to the same types of information, including daily net asset value, quarterly fact sheets, audited financials and CIT ticker symbols. “Transparency should no longer be a perceived gap for CITs, especially as more real-time performance information is available — both from the provider and through services such as Morningstar or Fi360 — making it easier to track and rate them,” Dargis noted.
He emphasized the importance for plan sponsors, as fiduciaries, to compare CITs with other investment vehicles and share classes and evaluate them in light of the size, assets and demographics of their plans. “It’s really in their best interest to ask whether the plan — and especially its participants — might benefi t by switching some asset categories or target-date suites to CITs.”
USAGE TRENDS
CIT growth has been driven mostly by large and mega-sized plans, as they generally have more resources and have become more comfortable with using them versus the smalland mid-sized plans. But Dargis pointed out that utilization has been slowly moving down market, and mid-sized plans are increasingly using CITs as well.
“We’re seeing mid-market plans with less than $1 billion in assets adopting CITs, and we expect that trend will continue,” he said. “Among smaller plans, there is an educational learning curve to address, but it is underway with DC investment-only providers, plan aggregators and other intermediaries.”
With CIT usage in 401(k) plans growing at a healthy clip, making it a critical component of the U.S. retirement market, regulatory approval for its use in 403(b) plans would be a welcome development. As Dargis summed it up: “The efficiency and flexibility of CITs provide plan-level pricing flexibility, a cost-efficient vehicle for custom target-date strategies, an expanded universe of investment objectives and enhanced transparency and reporting to meet the needs of all DC plans and participants.”
Sponsored by:
Ryan Dargis
Global CIOs taking a fresh look at risk mitigation
A skewed relationship between equities, bonds prompting some to act y B
SOPHIE BAKER
A core concept of an institutional portfolio is under scrutiny by a number of investors, with the relationship between stocks and bonds in the spotlight as pension funds continue to assess and upgrade risk mitigation strategies.
For two decades, equities and bonds behaved as expected: A con-
sistent, negative correlation between the two major asset classes meant bonds offered protection to a portfolio when equities sold off.
The global nancial crisis exempli ed this correlation, with the S&P 500 down almost 50% and bonds rallying more than 20% in 2008.
But then in 2022, money managers and investors — many for the rst time in their careers — had to deal with positive correlation between the two asset classes, as both equities and bonds sold off.
The phenomenon has some investors worried enough to look closely at the new(ish) trend and
some are taking action to mitigate the risk of another positive period for correlations impacting on their portfolios.
“We’ve had this concern for quite a while, because before 2000, the equity/rates correlation was positive, then became negative and has been quite negative the past 20 or so years,” said Christian Kjaer, head of liquid markets at ATP, Hilleroed, Denmark, which had 710 billion Danish kroner ($102.7 billion) in assets as of March 31. “And we always had this worry of ‘what if it changes back to being positive?’” he said.
ATP, which measures risk expo-
sure in the portfolio across equities, rates, in ation and other factors, has a basic portfolio that is “very diversi ed and low risk, and then we lever that portfolio to the desired risk level,” he said. Broadly speaking, the overall risk level is determined by the volatility of assets and correlation between the assets. “So when volatility comes up, our risk comes up and we need to decide on how to address that. When correlations change, our risk also changes,” he said.
While that fundamental dynamic is similar for a traditional 60% equity/40% bond portfolio, “we are slight-
ly more exposed to these things as we use some leverage to get to the right risk level,” Kjaer added.
ATP had started work prior to 2022’s positive correlation, “but intensi ed the work on what could we do to address this,” Kjaer said.
The result is two new overlay strategies for the portfolio. Executives expect both strategies to be integrated into the portfolio this year.
The rst, which has been running as a test, is an on/off-type developed markets strategy, with the positioning either long-risk if correlations
it with your broader corporate goals, such as cash optimization and debt management. This session o ers actionable insights to enhance your pension risk management approach.
Two Sigma’s co-founders John Overdeck and David Siegel are stepping down as co-chief executives of the hedge fund following a feud that spilled into public view through a regulatory ling and handing control over to two new co-CEOs.
Scott Hoffman and Carter Lyons were appointed co-chief executive of cers effective Sept. 30. Overdeck and Siegel will continue to serve as co-chairmen of the rm, according to an Aug. 28 news release announcing the leadership changes.
Siegel and Overdeck founded Two Sigma in 2001. The feud between Overdeck and Siegel shot into public view when the rm disclosed in a Securities and Exchange Commission Form ADV ling in 2023 that their strained relationship was a potential material risk to clients with the two disagreeing on rm organization, succession plans and other matters.
The Aug. 28 news release noted that “David and John will step away from their day-to-day management roles, but continue lending their deep quantitative investment and technology expertise as Co-Chairmen to ensure that the company remains at the forefront of nancial sciences.”
Lyons served as Two Sigma’s chief business of cer and has been at the rm for 13 years after joining from BlackRock. Hoffman was the former chief administrative of cer and general counsel at Lazard until his retirement in 2023.
As part of the leadership changes, Two Sigma announced Ali-Milan Nekmouche, chief investment of cer of equities, will now take on the additional role of chief investment ofcer for Two Sigma Investments, previously held by Overdeck. Geoff Duncombe will continue as chief investment of cer for Two Sigma Advisers and chief investment of cer of Macro.
The release noted that Hoffman and Lyons will work with Nekmouche, Duncombe and Jeff Wecker, Two Sigma’s chief technology of cer,
Here’s a glimpse of the professionals you’ll engage with at P&I’s 2024 Fixed Income & Credit Series. We’re bringing together thought leaders from across the institutional investing space for a day of insightful discussions in Chicago & New York. You’ll have the opportunity to connect with experts and peers who are ready to challenge current thinking around fixed income allocation in today’s rapidly changing environment.
INVESTORS IN ATTENDANCE INCLUDE:
Aksia
ASIMCO
Atlantic Health System
AustralianSuper
CalPERS
Arkansas Teacher Retirement System
Battery Park City Authority
CAPTRUST
Chicago Public Schools
Exelon
City of Stamford
Gavi
Lewis University
Citigroup U.S. Pension Investments
Bourbon Financial Management (Family O ce)
Illinois Firefighters’ Pension Investment Fund
Illinois State Treasurer’s O ce
LMP Institutional Investing Consultants
LEADSPONSORS:
GENERALSPONSORS:
Meketa Investment Group
Metropolitan Transportation Authority
Metropolitan Water Reclamation District
New York University
PepsiCo
PlanPilot
New Hampshire Retirement system
NYS Teachers’ Retirement System
SWIFF Energy
NYC Board of Education Retirement System
Peninsula House, LLC (Family O ce)
Times Square Alliance
The Estee Lauder Companies Inc.
The Univ. of Central Florida Foundation, Inc.
Verizon Investment Management Corp
Verus
Wespath AND MORE!
ASSOCIATESPONSORS:
ADVANCING EQUITY
CAIA, Toigo team up to boost diversity in the alts industry
To keep moving the needle on diversity within the world of institutional investing, it’s important to strengthen, enhance or modify partnerships meant to advance that mission, said Nancy Sims, president and CEO of the Robert Toigo Foundation.
That’s what the foundation aims to do under its new partnership with the Chartered Alternative Investment Analyst Association, she told Pensions & Investments in an Aug. 20 interview alongside CAIA President John Bowman.
U.K. investment rm
Octopus Investment and earthtech startup Treeconomy are collaborating on a trial to integrate space satellite data into investment decisions for carbon and nature-based strategies and have been awarded an “Unlocking Space for Business” grant that is valued at £113,000 ($144,000) an Octopus spokesperson revealed to Pensions and Investments
Leaning on its experience in AI, Treeconomy will provide Octopus with digital measurement, reporting and veri cation services to monitor Earth’s activities “in a transparent and cost-effective manner,” a news release from Octopus revealed.
The founder of the grant, the United Kingdom Space Agency, was established in 2010 by the U.K. government to replace the British National Space Centre. Both Octopus and Treeconomy applied for the grant in May.
“By integrating earth observation technology into the diligence process, we will gain unique insights that will allow our strategy to become increasingly robust and data driven,” Alex Godfrey, investment director at Octopus, said in the release.
Earlier this year, Octopus announced the launch of its natural capital strategy and is committed to using technology to achieve ef ciency and impact for the new strategy, which is why it decided to partner with Treeconomy for this grant, according to the release.
The UKSA-funded project period will be completed in March 2025, the Octopus spokesperson said in an email.
As of March 31, 2024, Octopus reported £13.5 billion in funds under management.
— ABIGAIL PARROTT
Moving forward, CAIA will provide Toigo fellows and alumni access to educational resources and networking opportunities in the hopes of improving their exposure to alternative investments, Recipients can access education-
al material on alternative investments with the ability to learn synchronously through webinars hosted by charterholders, or asynchronously through videos lmed with members including Bowman, who will also take on the role of CAIA’s CEO on Dec. 31.
The intended end result is to improve the path for diverse nancial professionals in obtaining certi cation and set them apart in the job market, Bowman said.
Of the more than 2,000 Toigo alumni, close to 10% of them have obtained CAIA designation, Sims said. But within the overall alternatives industry, diverse talent make up “mid-to-high single digits,” Bowman noted, adding that within speci c asset classes such as venture capital, “sadly, it’s even
lower than that.”
Networking events through CAIA’s 35 chapters worldwide will aim to connect Toigo participants with industry professionals as well as potential hiring managers.
“There are always going to be ebbs and ows,” in the march toward diversity, but “this time is differentiated in many respects,” said Sims, who pointed to growing concerns over the future of initiatives meant
THE WINNING BID
to support diverse talent.
When one assembles teams with members of different socioeconomic backgrounds, race, gender and upbringings together, and then “you embrace, invite and celebrate different perspectives, you’re going to make better decisions,” Bowman added. “In our industry, what that means is clients are going to bene t with better investment outcomes.”
Abu Dhabi fund bets on art, luxury goods with Sotheby’s stake
ADQ, Abu Dhabi, is taking a minority stake in ne art and luxury goods broker Sotheby's.
ADQ, a $196 billion sovereign wealth fund, will acquire an undisclosed stake in Sotheby's, a spokesperson con rmed. ADQ is investing alongside Sotheby's owner Patrick Drahi to support the company's growth and innovation plans, an ADQ news release said. Drahi will remain the majority owner of the auction house, and the total new investment is $1 billion.
“Our investment underscores our rm belief in the enduring value of Sotheby’s brand, market leading platform and the ability of its management to execute on their growth agenda,” Hamad Al Hammadi, deputy group chief executive of cer at ADQ said in the release. It's part of ADQ's strategic commitment to nd investment opportunities that contribute to the economic diversi cation of Abu Dhabi, the release added.
In April, ADQ acquired a 49% stake in Plenary Group, an Australia-based independent investor, developer and manager of public-private infrastructure projects. In January, ADQ announced the signing of de nitive agreements for the strategic acquisition of a 40.5% stake in Egypt-based Talaat Moustafa Group Holding’s hospitality arm, ICON Group.
Norges Bank Investment Management, responsible for the management of the Government pension fund of Norway Sovereign Wealth Fund, and the United National International Children’s Emergency Fund, announced its newest collaboration, con rmed by both in a release.
Responsible for providing humanitarian and developmental aid to children globally, the United National International Children's Emergency Fund will collaborate with Norges Bank to explore the child-speci c impacts of companies’ digital activities and develop a comprehensive set of child rights disclosures to improve reporting and transparency in this
area. A wide range of stakeholders, including companies, academia and civil society organizations will be consulted to understand current market practices and identify gaps that may exist. Recommendations are expected in 2025.
Building on previous collaborations between the two beginning in 2017, this third phase of collaboration will focus on children’s rights in the digital environment by producing a set of disclosures that aim to increase transparency on how companies impact children’s rights in the digital environment.
Concerns about digital safety is on the rise within the industry. On
Aug. 9, Varma, Finland’s largest occupational pension fund with €60.9 billion ($66.4 billion) assets under management, con rmed it had joined a joint initiative by the United Nations-backed Principles for Responsible Investing that aims to prevent negative impacts of social media and smart device use. In 2023, AXA Investment
Management and Sycamore Asset Management headed the collaborative engagement dialogue on technology, mental health and well-being, supported by the PRI. Today, the campaign involves 33
CARYL ANNE FRANCIA
PARTNERSHIP: Robert Toigo Foundation’s Nancy Sims and CAIA’s John Bowman.
ABIGAIL PARROTT
POUNDING THE GAVEL: A Sotheby’s auctioneer takes bids for a painting.
PRIVATE CREDIT
Spectrum of Solutions
Private credit remains at the top of the list for institutional allocators looking for diversification and higher return potential versus public credit. Even as capital inflows continue into the space, investors have become more discerning across a wider opportunity set ranging from corporate credit – still the core allocation in private credit for many investors – to asset-based private credit, fund finance, specialty finance and more – depending on their target portfolio objectives.
Our panel of experts will share their macro perspective and its impact on current and potential opportunities across private credit. They will dig into the nuances of specific segments and their underlying market drivers. And in a shifting rate and credit cycle that has resulted in a wider dispersion of returns by managers, they double-down on the type of manager experience and expertise needed in private credit in order to deliver the risk-adjusted returns that investors seek.
OPINION
OTHER VIEWS JASON LEVY, RYAN QUILLIAN and MATTHEW SHAPANKA
How managers and plan duciaries can insulate themselves from ESG scrutiny
As ESG investing has become increasingly politically polarized, we have seen asset managers and other service providers to retirement plans take steps to clarify their neutrality on the issue.
Similarly, retirement plan duciaries closely review asset manager disclosures and marketing material when making investment decisions with ESG implications or overseeing voting of proxies associated with plan assets.
These activities may take on even greater importance as Republicans continue to support rolling back environmental, social and governance investing to the greatest extent possible. In particular, if there is an administration change in 2024, we see the prospect of signi cant enforcement activity across several substantive legal disciplines.
As a result, it may be timely for asset managers and retirement plan duciaries to take the opportunity now to con rm that their internal policies, procedures, investment strategies, external disclosures, and marketing materials concerning ESG can withstand what may be intense scrutiny.
ERISA: Although the subject of active litigation, we believe that the standard for making investment decisions involving ERISA assets is clear: Investment decisions must be made for the sole purpose of maximizing risk-adjusted nancial returns. Asset managers might offer the same products to retirement plan clients that are subject to ERISA as they do to other clients that are subject to very different legal and regulatory regimes. Given this divide, asset managers face the challenge of ensuring that their communications are tailored to allow ERISA duciaries to select their investment products while still ensuring that such products are attractive to other clients and otherwise are aligned with those clients’ overarching business goals and differing legal environments.
The challenge in threading this needle may become more dif cult if Republicans see electoral success in 2024. We expect that a Republican Department of Labor would issue broad information requests to ERISA-covered retirement plans to identify plans that (a) offer or have made ESG investments; (b) have invested in funds that have made pro-ESG proxy votes, including in reliance on advice from institutional shareholder advisory services; (c) have discussed ESG factors in duciary committee meeting minutes; (d) have considered participant ESG preferences in constructing a 401(k) plan lineup or in making de ned bene t plan investment decisions; and (e) have invoked the “tiebreaker rule” to make an investment decision.
not issued any guidance on the intersection of antitrust and ESG. But enforcers under the current administration have been clear that there is no ESG exemption to the antitrust laws and that otherwise illegal conduct or mergers will not be saved by ESG commitments.
Over the course of the past four years, Republican state Attorneys General and Republican members of the U.S. House of Representatives have issued numerous letters and subpoenas to nancial institutions seeking information about their ESG investing
whether the companies reached a joint agreement on emissions targets, but ultimately closed the investigation without bringing an enforcement action. DOJ under a future Republican administration likely would be even more aggressive in its scrutiny of ESG-related activities, including joint commitments to achieve speci c ESG goals or targets.
Jason Levy, Ryan Quillian and Matthew Shapanka all work for law rm Covington and Burling LLP, where Levy is an of counsel in the rm’s Washington of ce, Quillian is a partner in Washington and Shapanka is a special counsel in San Francisco. Covington and Burling Senior Counsel Richard Shea and Associates Jack Lund and Alezeh Rauf also contributed to this article. All three are based in the rm’s Washington of ce.
practices and claiming that such practices may constitute per se violations of federal and state antitrust law.
Political risk: Congress and federal agencies have shown considerable interest in ESG issues over the past few years, and political division over ESG investing is likely to continue. The DOL in both the Trump and Biden administrations issued rules concerning ESG investing by ERISA plans, and congressional Republicans have investigated several issues related to ESG initiatives. The Republican-led House Oversight and House Judiciary Committees have held multiple hearings on ESG policies on several topics, including consumer protection, ESG investing, and antitrust, and we expect these political investigations to continue in the coming months and next year, particularly if Republicans retain control of the House and/or secure control of the Senate. Ongoing congressional investigations carry risks that nancial industry executives could be called to testify or produce documents concerning their ESG practices to Congress.
Armed with this information, we expect the DOL to prioritize audits of plans on these issues followed by enforcement actions. Similarly, the next Republican DOL may intervene in plaintiffs’ suits challenging the inclusion of ESG investments in retirement plans, which in turn may encourage more such suits, and greater scrutiny of such investments by the plaintiffs’ bar. Well-crafted disclosures, marketing material, and advice, along with documentation of investment decisions that track the ERISA standard, may help asset managers and retirement plan duciaries withstand this barrage of scrutiny.
Antitrust: The federal antitrust agencies have
Only one such investigation has, thus far, resulted in a formal lawsuit. The state of Tennessee sued a major asset management rm in 2023 under the Tennessee Consumer Protection Act. Though Tennessee had previously cited antitrust concerns during its investigation, it ultimately did not bring any antitrust claims.
The potential for investigations by federal antitrust agencies is likely to increase substantially if a Republican administration were to take of ce. During the most recent Republican administration, the Antitrust Division of the Department of Justice launched an investigation into agreements between automobile manufactures and the State of California’s Air Resources Board that set vehicle emissions standards that were stricter than those set by the federal government. DOJ investigated
On the other hand, a second Trump administration may prefer to pursue anti-ESG policies directly, relying on agency investigations and enforcement of ESG policies, such as those described above. This approach would increase the legal exposure of ESG investment funds, separate from (or in addition to) the political risks inherent in the partisan divide on ESG policy.
Financial institutions, asset managers and retirement plan duciaries that start planning today for additional scrutiny of ESG are likely to be much better positioned in the coming months and next year, no matter what the political future may hold.
OTHER VIEWS YANA MORRIS
Why private credit’s ‘golden moment’ isn’t over yet
In 2023, Blackstone President Jon Gray declared a “golden moment” for private credit, and recently, the world’s largest alternative asset manager said that this $1.7 trillion market class is set to swell to $25 trillion.
With increasing volatility in traditional capital markets over the past few weeks, highlighted by plummeting stock prices, private credit has become a exible and reliable alternative. When traditional capital dries up, it provides businesses with the necessary funds to navigate challenging economic conditions and pursue growth opportunities. However, this shift toward private credit is by no means new. Following the global nancial crisis, tighter lending and banking regulations opened the door to private credit. Buoyed by higher base rates and a marked shift away from traditional bank lending, the $1.7 trillion asset class has emerged as an increasingly attractive source of funding for private equity on both sides of the Atlantic.
Debtwire data shows that European direct lending now funds three-quarters of leveraged buyouts — a sharp rise from just 25% in 2020.
Despite this, some industry commentators question the endurance of private credit, pointing to a slowdown in the pace of buyouts and a liquidity crunch faced by private credit funds. Yet it is clear that there is a space for private credit as a viable nancing alternative to both banks and private equity long term, particularly for the underserved middle- and lower-middle market.
Private credit’s meteoric rise
Debtwire tracked the rise of this asset class in the years since the nancial crash when banks began retrenching, prompting deepening demand for private capital solutions.
According to our data, direct lending in particular has fast become the private credit strategy of choice for institutional investors, providing a critical alternative funding source from traditional lending channels, with U.S. deal
Yana Morris is chief content of cer at ION Analytics, where she leads a team of 500 domain
experts focused on capital markets. Through its core brands — Debtwire, Dealogic, Mergermarket, and Infralogic — ION Analytics informs the decisions of banks, law rms, and advisers worldwide.
volume reaching heights of $62 billion in the fourth quarter of 2023 (see Figure 1)
In addition to the retrenchment of the banks, private equity has also been hit by macroeconomic headwinds, as a gap in valuations and over-allocation has slowed down nancing for deals. This created an opportunity for private credit to take market share and lend directly to private equity portfolio companies to fund leveraged buyouts. As a result, Debtwire data shows that direct lending now accounts for just over a quarter of European buyout nancing in 2023 and 2024, with public debt markets providing 25%–45% of capital.
Branching out into private credit has also become a way for investors, or limited partners, to diversify their holdings, providing a much-needed buffer against macroeconomic and in ationary headwinds while protecting against price uctuations in public markets.
In addition to private credit, other alternative asset classes have also stepped into the limelight as private equity and bank lending have stuttered. Infrastructure and private real estate provide a greater opportunity for capital appreciation, depending on the quality of the asset and risk pro le, while infrastructure can provide a reliable return, regardless of economic downturns, due to the nature of the asset class. However, it is direct lending that has emerged as king among alternative
Iam writing regarding the Aug. 2 article titled “Thrift Savings Plan’s rocky rollout of new system caused by mismanagement, GAO says.”
The article painted an incomplete picture of the results of the Federal Retirement Thrift Investment Board transition to a new record-keeping system in 2022 and failed to include any clarifying information provided by us to the Government Accountability Of ce which could have been found in the report. All the topics raised by GAO and highlighted in your article were known to the FRTIB and had been, or are being, addressed. Your article ignores the changes made over the
Figure 1 U.S. direct-lending volume
Source: Debtwire
Figure
2 European direct lending has become the primary source of funds for LBOs
risks, however, and there are signs that the market is beginning to slow. Debtwire data demonstrated a drop in overall European buyout volumes to less than €100 billion ($110 billion) in 2023 from €250 billion in 2021. Furthermore, concerns are mounting that the private credit market may experience a liquidity crunch due to reduced nancing activity, potentially leading to reduced returns, both in absolute and relative terms. Private credit providers are now shouldering the burden of defaults, too. A report published by Debtwire showed that since 2018, direct lenders have fully or partially equitized at least 61 loans to companies backed by some of the biggest names in private equity, including KKR, Carlyle, CVC and Bain Capital.
As the cost of servicing oating-rate debt has increased, many private equity portfolios have struggled to meet interest payments. In many instances, this forced lenders to step in to take over control of troubled companies hamstrung by untenable debt levels under messy restructurings. In the latest example of a leveraged-buyout-gone-wrong, Vista Equity is reportedly in talks to cede control of educational software provider Pluralsight — which it acquired for nearly $4 billion just three years ago — to its lenders. Pluralsight’s lenders are a who’s who of private credit, including Blue Owl Capital, Ares Management, Goldman Sachs, Golub Capital and Oaktree. This should serve as a reminder that just because a deal is big doesn’t mean it is absent of risk.
Source: Debtwire
asset classes, thanks in large part to the promise of higher yields and greater exibility (see Figure 2)
The dramatic rise of direct lending — from supporting just a quarter of new European LBOs in 2020 to dominating the market in recent months — indicates a significant increase in the market share for private credit. At the same time,
past two years. As stated in our letter to GAO, the FRTIB will use GAO’s report to inform our ever-evolving improvements to the Thrift Savings Plan.
Among the omitted facts and details are the following:
On June 1, 2022, more than 26 billion records and $743 billion for 6.56 million participants converted successfully. All record-keeping functions were operational and secure, including posting of payroll contributions, investment elections, fund reallocations, loans, disbursements and rollovers.
The transition to a new record keeper was
a near-total absence of high-yield bonds in new LBO nancings in the rst quarter of this year, coupled with the limited use of leveraged loans, underscore a clear trend away from more traditional public market nancing.
Not without risks
Private credit is not without its
of utmost importance to TSP participants to ensure their services were housed in a secure and adaptable system. These bene ts have been achieved. Our new zero trust architecture makes optimization of security capabilities more cost-effective and exible.
We have always viewed participant satisfaction as a barometer for other interactions with the TSP. As the record keeper has improved and matured its service, participant satisfaction has been at or above 92% for the past six months.
Some of the new services participants have gained are: the use of a concierge service for roll-ins; separated participants
There are also questions about the long-term viability of private credit. Due diligence for private credit is notably more complex compared to public markets, requiring additional expertise within asset management rms. As more lending shifts toward private credit, the less transparent the market becomes, hence the possibility of systemic risk. Lack of transparency in a relatively immature market is also a concern, as assets are more likely to be overvalued, leading to concerns
can continue to repay outstanding TSP loans; a retirement income calculator in the TSP My Account that minimizes the participant’s need to enter TSP-related data; and a loan status tracker to allow the participant to follow processing in real time.
We appreciate P&I printing this letter as the reporter did not allow suf cient time for the FRTIB to respond to the request for comment, nor did the article include reference to our detailed response included in the GAO report.
APublisher’s Letter
2024 class of honorees show commitment to driving change
s we unveil our second annual list of In uential Women in Institutional Investing, I am once again inspired and proud to highlight this exceptional group of women and their remarkable accomplishments.
This year’s dynamic cohort of 60 women, who collectively manage $59 trillion in investable capital, exempli es not only the power of our industry to drive positive change across markets but also the commitment to improving outcomes for bene ciaries and promoting greater representation across the industry.
The overwhelming support from our community of honorees and advocates over the past year has been nothing short of amazing, re ecting the unity, purpose and progress that de ne our industry. Through group calls, Zoom meetings, in-person gatherings, and countless messages of encouragement, we’ve seen this community ourish. A testament to this engagement is the introduction of our Rising Stars recognition program, honoring 40 women who, despite having a decade or less of experience, are already making a profound impact in our industry.
These women were nominated by senior colleagues and industry advocates for their contributions and potential. Our goal is to address the "broken rung" that often hinders women as they transition into senior leadership roles. We consistently hear about the critical role of mentorship, sponsorship, and networking in helping professionals ascend the career ladder, and we aim to support this by providing content, access and community for these Rising Stars.
Our 60 IWII honorees being recognized today have not only excelled in their respective roles but have also demonstrated a profound commitment to elevating our industry to greater heights. Their tireless service, relentless pursuit of excellence and unwavering dedication have not gone unnoticed. We are truly privileged to honor each of them and to shine a spotlight on what it means to be a successful woman in institutional investing today.
While the group of honorees is varied in background, experience and their role in the industry, a common thread among them is the desire to lift others and the drive to bring about positive change. I hope that you’ll take the time to read their incredible stories of achievement and dedication and learn how they are helping to shape our industry and make a positive impact on diversity, pay equity, belonging, and representation, while encouraging more women to seek a career in institutional investing.
I’d also like to express my immense gratitude to our advisory board who helped promote the nomination process, develop the content for our In uential Women in Institutional Investing Conference and served as judges for the awards this year.
They have been a source of inspiration and encouragement throughout the year and help us continue to build this community. Thank you for sharing your time, expertise and insights! And a special thank you, too, to the industry experts who provided additional help with the judging.
As we honor these deserving women and celebrate the spirit of excellence that de nes our eld, let us recognize that this celebration is not only about past accomplishments but also a commitment to a future driven by innovation, diversity and collaboration. We are immensely grateful for your encouragement, and we pledge to continue our mission of celebrating and uplifting the incredible individuals who make our industry thrive and reinforcing our belief in the vital importance of recognizing female leaders.
Listed in alphabetical order.
Taf Ayodele Of ce of the New York City Comptroller
Rigorous criteria determined how 2024 honorees were selected
Pensions & Investments collaborated with an advisory board of leading investors and key industry executives to determine questions and shape areas on which to focus for the 2024 In uential Women in Institutional Investing conference.
To be considered, nominees needed to be actively employed in the institutional investing eld and have a minimum of seven years of industry experience. They were required to demonstrate a measurable effect and results within both their workplace and the industry. Ideal candidates were expected to exhibit a commitment to attracting, retaining, supporting and promoting women within the industry. Letters of recommendation supporting their application also were requested.
Women from across the industry were eligible for consideration, including asset
owners, asset managers, consultants, service providers and other pivotal roles. Self-nominations were allowed.
Each nominee was evaluated by members of the 2024 advisory board and an additional judging panel comprising a distinguished group of industry experts, along with members of the P&I leadership and editorial teams. Entries were grouped based on years of industry experience for equitable judging: seven to 12 years of experience; 13 to 20 years and 20-plus years of experience. Nomination criteria were:
Career accomplishments
Fostering growth/development of others
Leadership
Philanthropic and community involvement
Proven contribution to the industry
Letters of recommendation
P&I Publisher Nikki Pirrello
Taf Ayodele
Director of diversity, equity and inclusion and emerging manager strategy, Bureau of Asset Management, New York City comptroller’s of ce
Even though she works in the bluest of cities in the bluest of states, Taf Ayodele sees how it’s still a struggle for women and minorities in small companies to demonstrate their nancial skills to large asset managers.
“It’s actually more challenging than you think,” said Ayodele, director of diversity, equity and inclusion and emerging manager strategy for the Bureau of Asset Management in the New York City comptroller’s of ce. The bureau handles investments for the ve independent pension funds in the $270.5 billion New York City Retirement Systems.
“It’s harder than it should be,” said Ayodele, who joined the comptroller’s of ce in October 2022, taking a job that had been vacant for two years.
Minorityand womenowned business enterprises now manage 12.7% of the retirement systems’ assets. “That could be much higher,” said Ayodele, seeking a goal of 15% in 2025 and 20% by 2029.
Part of her role is disabusing critics that emerging and diverse managers underperform. The comptroller’s of ce found that on both public and private markets, these managers have added additional alpha above their market equivalents.
Ayodele came to her present job via traditional and less traditional paths. An undergraduate degree in economics and an MBA from New York University were among the former. So, too, were investment banking and real estate investing as well as an executive position at the New York State Dormitory as director, Of ce of Executive Initiatives — Financial and Professional Services Diversity Programs.
Co-founding a footwear company in Lagos, Nigeria, with her husband, a Nigerian and NYU alumnus, from 2012-2019 was the latter. The company’s goal was to create a platform for African men and women to create designs for a global audience.
“We had over 4,000 customers and I struggled to raise money,” she said. The challenges of raising money as an entrepreneur plus the advice from mentors over the years make her sensitive to the hopes and struggles of emerging managers.
“Since the beginning of my career, they always have challenged me to think differently,” she said. “I think of them as my personal board of directors.”
In business school, Ayodele was counseled by teachers to think about medium-term goals and long-term goals. “Supporting and increasing diversity among managers was my long-term goal,” she said. “At rst, I thought it might be in consulting.”
ROBERT STEYER
SIN INSTITUTIONAL INVESTING
Sabrina Bailey
abrina Bailey has played many roles in her almost 20-year career and that’s by design. When she started out, she said there were two choices — become a specialist or opt for a varied path that offered a range of experiences. She opted for door No. 2. As a result, she’s held roles in investment consulting, asset management, ntech, data and analytics.
At Fiducient Advisors, which had more than $309 billion in assets under advisement at year-end, she stands out as one of only a handful of female CEOs within P&I’s 2023 survey of the top 50 largest investment consultants by institutional assets under advisement.
Before joining Fiducient, Bailey led a $1.1 billion sale of a non-core business at London Stock Exchange Group, which doubled revenue growth for the core business in under two years. She also was involved in acquisitions at Northern Trust Asset Management. In each role, she says her focus was on service and helping people.
“I’m always looking for four things when I consider my next step,” she said. “Does it align with my passion? Does it serve my purpose? Will it increase my knowledge? And, will it expand the network of people I can learn from and serve?”
While it’s always hard to predict the future, Bailey said those four questions have proven to be timeless. When she looks to the future, she said there are many opportunities to leverage new technologies to improve client service — like automation and arti cial intelligence.
“I’m going to let my framework help me pick the right steps,” she said. “There are so many new ways nancial services can provide value, and I think that’s exciting.”
BAILEY M c CANN
Michelle Black
Solutions portfolio manager, principal investment of cer of the American Funds Target Date Retirement Series, Capital Group
Looking at an old family photo reminded Michelle Black of when she rst became interested in nance.
Her father, an engineer, is sitting in an easy chair reading The Wall Street Journal with a very young Michelle looking on.
“The best way to learn is by reading,” Black recalled her father saying, including prospectuses. Black paid careful attention to nance as an undergraduate business major at the University of Southern California.
At rst, she thought about a career in marketing or nancial public relations but shifted her focus, becoming an investment-planning analyst at Sanford C. Bernstein & Co. before starting a 21-year career at Capital Group, which had more than
$2.7 trillion in assets under management as of June 30.
She started in wealth managemanagement, and she is currently principal investment of cer of Capital Group’s American Funds Target Date Retirement Series and chair of Capital Group’s target-date solutions committee.
Black said she has bene ted from an assortment of mentors whose advice went well beyond the mechan-
Meet the IWII advisory board and judges
Pensions & Investments assembled an advisory board of leading investors and key industry executives to evaluate nominations and shape themes for the upcoming In uential Women in Institutional Investing conference, to be held Sept. 12 in Chicago. Along with the advisory board, other industry leaders and P&I staff were key in reading and evaluating nominations for the 2024 class of female leaders.
Advisory board
OLAOLU AGANGA , U.S. CIO, Mercer
MACHEL ALLEN , president, CIO, Metis Global Partners
KELLY BALDONI , vice president for global women's strategies, Impax Asset Management
TINA BYLES WILLIAMS , CEO, CIO, Xponance
ROBIN DIAMONTE , CIO, RTX Corp.
AMY FALLS , vice president, CIO, Northwestern University
MARGARET FRANKLIN , president, CEO, CFA Institute
JOANNE HICKMAN DODD , CEO, DoddReach Consulting; co-founder, advisory council member, Women Investment Professionals (WIP)
JUNE KIM , senior investment director of total fund management, California State Teachers’ Retirement System
LISA MASSENA , chief operating officer, Defined Contribution Institutional Investment Association; principal, Massena Associates
ANGELA MILLER-MAY , CIO, Illinois Municipal Retirement Fund
LEW MINSKY , president, CEO, Defined Contribution Institutional Investment Association
RUBY MUÑOZ DANG , director of marketing, client services, Garcia Hamilton & Associates
HARISHA HAIGH , managing director, Northwestern University
KIM HOURIHAN , CIO, CBRE Investment Management
ANNIE CHOR JOYCE , managing director, head of ESG, Amundi U.S.
MARY ELLEN MARTIN ZELLERBACH , managing director, Martin Investment Management
MINA PACHECO NAZEMI , head of the diversified alternative equity team, Barings
STEPHANIE PIERCE , CEO of Dreyfus, Mellon, BNY Mellon Investment Management
MARY PUGH , founder, CEO, Pugh Capital Management
STEPHANIE IVY SANFORD , partner, co-head of the Americas institutional client business, Goldman Sachs Asset Management
DEE SAWYER , head of global distribution, T. Rowe Price
VICKY SCHIFF , CEO, Avrio Management
MARY ELLEN STANEK , co-CIO Baird Advisors
SORINA ZAHAN , founder and CEO, Aiperion; CIO, managing partner, Core Capital Management
P&I STAFF: Erin Arvedlund , managing editor; Aaron Cunningham director of research and analytics; Gauri Goyal , director, content solutions; Rob Kozlowski , senior reporter; Kevin Olsen , enterprise editor
CEO, Fiducient Advisors
ics of nance. When she started at Capital Group, one person reminded her “we are running a marathon — not a sprint.”
Another counseled her to “always have a plan,” adding that “how you get there is just as important as what you get.”
Black said her themes for mentoring include how to work with others, how to communicate and the importance of knowing one’s audience. She puts theory into practice as a founding member of the Capital Solutions Group/Capital Strategy Research/DEI committee.
Her father’s advice about reading paid off outside of work, too.
A few years ago, Black was reading about dinosaurs to her twin boys, a favorite topic of theirs. She accompanied them on a visit to the Natural History Museum of Los Angeles County, home of the LaBrea Tar Pits.
She was recommended to join the museum’s board of trustees, where she is a member of the investment committee, which manages the endowment and retirement plan. “It was a natural place to gravitate,” she said.
ROBERT STEYER
Icon, Lifetime Achievement award winners named
Pensions & Investments has selected two outstanding leaders for its 2024 Icon and Lifetime Achievement Awards as part of its In uential Women in Institutional Investing program.
2024 Icon Award
Thasunda Brown Duckett is president and chief executive of cer of TIAA, a leading provider of secure retirements and outcome-focused investment solutions for millions of people and thousands of institutions. She leads a company whose mission is de ned by nancial inclusion and opportunity — goals and values she has upheld throughout her career. Under her leadership, TIAA is expanding its mission beyond higher education to all Americans saving for retirement.
2024 Lifetime Achievement Award
Anne F. Ackerley is a senior adviser to BlackRock’s retirement business. She previously was the head of BlackRock’s retirement group, overseeing the de ned contribution and retirement insurance businesses. Under Ackerley’s leadership, these businesses grew to $1.6 trillion in AUM — reaching more than 80,000 plans and more than 40 million Americans. Ackerley developed and brought to market LifePath Paycheck, a new lifetime income solution that is now available in de ned contribution plans.
Going . beyond
Lauren DeMore, CFA Portfolio Manager, Putnam Investments
Joy Booker
Managing director and head of Americas client relations, PineBridge Investments
Joy Booker runs races and wins medals as a podium-reaching triathlete. She also brings people together and maintains partnerships as a managing director and head of institutional client relations in the Americas at the $169.7 billion PineBridge Investments.
“Given no two clients are ever the same, my day to day is constantly evolving,” Booker said. But the positive and collaborative culture that the self-described “person-person” fosters with her colleagues enables them to cross the nish line together in creating solutions for clients.
After studying computer science at the State University of New York, Binghamton, Booker worked in management consulting, developing large-scale enterprise solutions for Price Waterhouse and later Deloitte.
Exposure to domestic and international clients that included banks and investment rms piqued
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her interest in transitioning from the technology side to the business side.
Obtaining an MBA from the business school at Columbia University led her to transition into investment management, making her way to New York Life Investment Management and Mercer before joining PineBridge in 2011.
Recognized for her work to advance diversity in the industry, Booker is a member of the DEI advisory board at PineBridge. She is also secretary of the executive board at the Opportunity Network, which strives to improve professional mobility for undergraduate students from underrepresented backgrounds.
On her desk is a rack with medals from races she has competed in — which, like her rm’s clients and assets, she hopes to add more of in the future. Accompanying the medals is a quotation from author R.S. Grey: “She believed she could, so she did.”
“It reminds us that our beliefs have the power to shape our reality,” Booker said. “And when we truly believe in ourselves, there is nothing that can hold us back.”
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Amber Brestowski
Principal and head of institutional advice and client engagement, Vanguard Group
The granddaughter of Polish immigrants, Amber Brestowski grew up in a Pennsylvania coal mining town.
“Financial stress was very much part of my childhood. But my father was a great saver and investor. From a very young age, I wanted to eliminate that sense of nancial insecurity,” said Brestowski, who joined Vanguard Group in 2007 after graduating from Temple University and subsequently earned an MBA from the Wharton School of the University of Pennsylvania.
At one point she took over the large-market institutional sales team. “I had to overcome impostor syndrome. It was all men, with decades worth of experience selling investments, OCIO, record keeping to endowments and foundations. I was the only woman and the team leader. My experience in strategy, relationship building and getting things done across the company were superpowers for my team.”
Today, she is the head of institutional product, advice and client experience. Women represent 60% of the 450 people on her team. She is involved with Vanguard Women in Leadership Success, a formal sponsorship and mentorship program. “I coach women on a one-on-one basis. I’m reaching as I climb,” she said.
Brestowski is also a rst-time mother to a
Paceline Equity Partners is a woman-owned Dallas based investment manager focused on value-oriented investments in special situations private equity, corporate debt, and real assets
14-month-old child. “I’m in the process of the new world of integrating work and life. The opportunity cost of everything becomes higher. I feel a great responsibility for millions of people. But I can shape one person’s complete view of the world.”
Going back to work was a “better experience. I’m engaged in it. I constantly tell women, don’t take a step back.” Vanguard has workers in of ce Tuesday through Thursday, and “It’s a place where I nd women ask for what they need. In most instances they receive that.”Vanguard had $9.7 trillion in global assets under management as of July 31.
ERIN ARVEDLUND
Stephanie Butcher
Senior managing director and co-head of investments, Invesco
As a history major at the University of Cambridge, Stephanie Butcher may have had an unorthodox path to asset management. But Butcher, senior managing director and co-head of investments at the $1.71 trillion Invesco, said that studying history gave her an adroitness that would prove useful for investing.
“History isn’t the obvious degree for a career in nance, I’ll admit, but I think the training involved — reading and assessing vast amounts of data, needing to look for evidence, examining topics from different vantage points, weighing evidence and drawing a conclusion — provided skills that I have leveraged throughout for my career,” she said.
Through interviews and work experience, Butcher found herself
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deciding between a career in the British Civil Service and nance but decided on nance because she liked having performance metrics tied to her name and career goals.
“I knew I would always be challenged and never be bored,” she said.
Based in Henley-on-Thames, a town about 40 miles west of London, Butcher said that her European perspective has helped her look at issues from different vantage points.
She has been involved with the Invesco Women’s Network since she began at the company and said she nds mentoring others incredibly rewarding, adding that continuous feedback has been especially important to her mentees’ career growth.
“If we wait to give feedback only at big moments, we miss the opportunity to develop the next generation on some of the soft skills that are critical to success,” she said. “I try to take an organic and positive approach to development and mentoring, both within our employee resource groups and within my teams.”
ERIN CHAN DING
Anne Casscells
Co-founder, co-president and chief investment of cer, Aetos Alternatives Management
Throughout her career, Anne Casscells has taken opportunities to pivot.
At 36, after stints at Morgan Stanley and Goldman Sachs, Casscells was caught up in a round of layoffs after interest rates spiked in 1994. It ended up being a key moment because Casscells realized she was deeply interested in nancial planning for institutions.
A graduate of Stanford’s business school, Casscells took the opportunity to pivot, landing a role at Stanford Management Co., responsible for asset allocation, currency overlay, risk management and the hedge fund portfolio. She developed the portable alpha program and rose to serve as CIO.
In 2001, an entrepreneurial opportunity arose and Casscells pivoted again, co-founding Aetos Alternatives Management along with Michael Klein. “There was an opportunity to take this endowment approach and bring it into the institutional world,” she said.
Sabrina Bailey
Now, 23 years later, Casscells said the $5.1 billion hedge fund of funds manager is “still largely doing the same thing,” investing based on fundamentals and asking, “where are there true alpha opportunities that you can execute on?”
Casscells is proud of Aetos’ diversity, with women and people of color making up 75% of staff. She said her own identity as a LGBTQ+ woman has helped in terms of recruitment, but that intentionality is also key when hiring, developing and managing people. She stresses “there are advantages to being the outsider,” especially being less susceptible to groupthink.
The progress women have made in nance over the course of her career is “encouraging and disappointing.”
“Alternative markets have really lagged,” she said, pointing to progress made on the support staff and marketing side while on the investment side it has been “disappointingly slow.”
There’s still a lot of work to do to encourage female students in high school to think about investing as a viable career path. “I’m working on this because by the time you’re out of college, it’s just about too late,” she said.
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Judy Chambers
Managing principal, private markets consultant, Meketa Investment Group
Judy Chambers’ nance career began early, working in a bank during the summer from age 15.
She continued working at banks while earning her bachelor’s degree and an MBA, the latter from Northwestern University’s Kellogg School of Management.
Chambers left banking and a job in Lehman Brothers’ nance department for private equity consulting in 2002, after meeting Allan Emkin, a managing principal and founder of consulting rm Pension Consulting Alliance. Meketa merged with PCA in 2019. Chambers is now a managing principal and private markets consultant at Meketa.
ensuring they get the proper exposure in front of the rest of the team, she said.
Fostering women’s growth starts with “one, recruiting them and then keeping them” by sponsoring them,
INSTITUTIONAL INVESTING
Amy Chen
Chief investment of cer, Smithsonian Institution
Female executives who are just starting out need time to get on the right path, she said.“Everyone is smart,” but they may not know what to do because they hadn’t done it before, she said.
Mentors have been key in her own career, with sponsorship being key, Chambers said. Sponsorship means that there is always someone at the table that is ghting for you even if you’re not in the room, Chambers said.
“What keeps you at a rm is sponsorship,” she added.
The industry has become more inclusive, better re ecting society than 20 or so years ago, Chambers said.
“But it’s still not 50-50,” she said.
“I go to a lot of meetings where I’m the only woman that has come through the room all day long. That shouldn’t be at this point in 2024.”
Meketa had $1.9 trillion in assets under advisement as of March 31.
ARLEEN JACOBIUS
When Amy Chen became the Smithsonian Institution’s rst CIO in 2006, its $800 million endowment invested in U.S. stocks and bonds only. Since then, the now-diversi ed portfolio has $2.6 billion in assets to support the Washington-based museum, research and educational complex.
Chen always wanted her work to make an impact, but didn’t imagine she’d do it through nance. After studying government at Oberlin College, she moved to New York for documentary lmmaking.
Films could reach many different communities, educate people and shape people’s minds about the world, she said. As the daughter of Chinese immigrants, she “was really focused on underrepresented peoples — particularly Asian Americans and telling their stories.”
But in her story’s next scene, a nancially strapped Chen took a job in operations at a hedge fund. She would transition to the trading desk until the rm shut down amid Drexel Burnham Lambert’s 1990 collapse.
A lack of formal training presented an obstacle in Chen’s pursuit of a job on Wall Street. Her desire to return to the arts led her to the New Museum of Contemporary Art. But she still felt “the itch” to go back to investing.
At a pivotal point, a recruiter introduced her to endowments and foundations. Chen would take investment roles at mission-focused organizations, starting with the Doris Duke Charitable Foundation,
which she joined as a portfolio manager in 1998.
Like her story, her love of lm goes on. She’s empowered by friend Gurinder Chadha’s 2002 lm “Bend It Like Beckham,” which Chen said, with “rising India,” is “symptomatic of girls’ rise to power.”
“I don’t advise our interns or others to follow my path,” Chen said. “But I think that the only overriding trajectory of my path was to feel con dent in my abilities to learn quickly and prove my worth.”
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A more secure retirement starts with a promise. And a track record.
Martina Cheung
President, S&P Global Ratings
Nearly 15 years after joining S&P Global, Martina L. Cheung is set to take the reins as president and CEO in November. She is currently president of S&P Global Ratings and also serves as the executive lead of S&P Global Sustainable, responsible for driving the enterprisewide growth strategy for sustainability.
In 2023, Cheung’s rst full year as president, the division achieved revenue growth of 9% and adjusted operating pro t growth of 10%.Cheung joined the company in 2010 as vice president of operations for S&P Global Ratings and went on to serve as S&P Global’s chief strategy of cer, where she was responsible for developing the company’s growth and innovation investment priorities.
Prior to joining S&P Global, Cheung worked in Accenture’s nancial services strategy group and as a partner at Mitchell Madison Consulting.
Her colleagues said that advancing inclusion has been a hallmark of Cheung’s leadership. She is the executive sponsor for the Women’s Initiative for Networking Success, an S&P Global people resource group with 7,000-plus members globally. She is also the executive champion for S&P Global's Diversity in the Markets Research Lab, which explores the impact of gender diversity on the markets.
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Alexandra Cooley
Co-founder and chief investment of cer, Nuveen Green Capital
Alexandra “Ali” Cooley, co-founder and chief investment of cer of Nuveen Green Capital, has always had an entrepreneurial streak.
But if early forays — like making jewelry in high school to sell to local retailers — were narrowly focused, two decades on Cooley’s ambitions have become far more expansive: working to build a marketplace capable of harnessing institutional money to make commercial buildings more sustainable.
That marketplace began in California in 2007 as a mechanism to help homeowners defray the costs of installing roof-top solar systems, with the state’s designation of clean energy as a public bene t paving the way for “property assessed clean energy” (PACE) nancing.
But by 2012, when she joined a lender set up to promote Connecticut state clean energy initiatives, Cooley said people were starting to mull “how it
could be used on commercial buildings.”
Over the past decade, Cooley has done as much as anybody to put the infrastructure in place to make that C-PACE (commercial property assessed clean energy) marketplace function.
Milestones include executing the rst big securitization of C-PACE assets in December 2021, which “helped scale the market, created standardization (and) brought institutional investors into the market in an organized fashion,” Cooley said.
And a year ago, Nuveen Green Capital launched the rst institutional investment vehicle focused on C-PACE assets, with combined allocations of $525 million from six insurers.
NGC currently accounts for roughly 35% of a C-PACE market estimated at roughly $7.25 billion.
Cooley sees the market enjoying continued momentum as an asset class that’s “relatively high yielding for the senior security that investors are getting,” with the added charm of being green.
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We congratulate Vivian Lin Thurston — one of P&I’s 2024 Most Influential Women in Institutional Investing — for her integrity, curiosity, and commitment to our clients, our communities, and our colleagues.
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Portfolio manager, Putnam Investments/ Franklin Templeton
As a young girl, Lauren DeMore watched her mother put on a suit every morning, grab a paisley scarf and head off to work for Xerox.
At the time, DeMore didn’t know about nance or asset management, “but I just knew that I wanted that,” she said. “I was so inspired by that. I just knew that I wanted to be a professional.”
The irony is that DeMore wears jeans to work and hates getting dressed up, but, she says, “I love being able to leave the space where I'm a mother and come to the space where I'm a professional.”
She landed at Putnam Investments because when she was deciding between that job and another offer, she at-out told the woman she was talking with, Pam Holding, who’s now at Fidelity Investments, that the other job was offering her more money.
According to DeMore, Holding said, “‘I can x that.’ And she got me a better offer to go to Putnam. And it was just such the perfect start to my career at Putnam that this woman, who was a
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Lauren DeMore Sonal Desai
portfolio manager, was like, ‘You need more money, you deserve it, I will make that happen for you.’”
The perspective she gleaned from that interaction — knowing her worth, making sure she wasn’t paid less than her male peers, thinking about taking care of her future self, and encouraging herself and others — are all insights she’s carried throughout her more than two-decade career in nance and in mentoring others.
“I like hyping people up, not just the women, the men, too,” she said.
“I love saying, ‘I see that you are feeling maybe a little vulnerable or insecure. Investing is a very, very hard job. I'm here for you.’Whether you're a man or woman, sometimes you have just a tough run of stocks. And it's really visible. I am here for you, you will get to the other side. I will tell you times when I felt like an idiot and wanted to hide under my desk; we will get through this together. Being a portfolio manager gives me the platform to connect with people that way, and it's made my job even more ful lling.”
At year-end, Putnam had about $178 billion in AUM.
ERIN CHAN DING
Executive vice president and chief investment of cer of xed income, Franklin Templeton
Sonal Desai, executive vice president and chief investment of cer for Franklin Templeton Fixed Income, who oversees $200 billion in assets under management, spent a formative six years as an economist at the International Monetary Fund from 1994 to 2000.
She said her experience at the IMF was crucial as it allowed her to understand how economic policies are formulated and their direct impact on the real world — something that helps her anticipate the likely path and repercussions of economic policies on markets. Before her tenure at the IMF she was an assistant professor of economics at the University of Pittsburgh. She ultimately joined Franklin Templeton in 2009 and assumed her current role in 2018.
Desai said in her career she has seen women make progress into the top ranks of asset management, but thinks that clearly more progress is still
needed.
“We should not lose sight of the fact that women have indeed made signi cant advances in this eld and will continue to do so,” she said.
While mentorship of younger women already in the industry will be crucial to the future, Desai points out that in order to maintain a strong pipeline of female talent, rms should reach out to female students as early as high school in order to encourage them to consider nance and asset management as careers.
“This remains a male-dominated eld, and I do often nd myself as the only woman in a
room,” she said. “However, in these occasions I don’t think of myself as a woman and the other people as men — rather, I see myself as an investment professional talking with clients or colleagues.”
Desai also suspects that some young women might not consider nance/asset management as “meaningful” careers.
“We need to change this mindset,” she said. “Helping to secure a stable retirement for people by protecting the value of their savings has a lot of meaning — we need to do better at explaining this to younger generations.”
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A self-described underdog, Sophia Tsai has competed for opportunities in the U.S. as an investment professional who completed her undergraduate education in Hong Kong and later immigrated.
But the managing director for the $6 billion endowment at Trinity Church Wall Street said this gives her the ability to “recognize other underdogs” striving for success and trying to stand out among the crowd, including diverse and emerging talent.
Advocates for diverse managers — as well as those considered “emerging”— are working at some of the largest allocators, investment managers and consulting rms. And among these advocates are female investment professionals who, like Tsai, have been named to Pensions & Investments’ In uential Women in Institutional Investing program. Some honorees noted their work to support diverse managers as one of their most cherished achievements.
The number of women- and minority-owned rms has grown by at least 20% annually over the past ve years, according to a report by Fairview Capital Partners based on data through Dec. 31. The $10.8 billion manager was co-founded in 1994 by managing partner and 2023 In uential Women honoree JoAnn Price.
But a 2021 study from the John S. and James L. Knight Foundation found that only 1.4% of capital within the $82 trillion asset management industry is managed by diverse groups.
“Keep that 1.4% number in mind because even for people who’ve been in the industry for a long period of time, including me, it’s a stunning underrepresentation — and an opportunity,” said Marcia Page, who has worked in the industry since the mid-1980s and has been named to the 2024 In uential Women class.
A co-founder of Värde Partners in 1993, Page said she has “been very happy to be under the radar for most of my career.” But “in the interest of moving more capital more equitably to women and other represented talent,” she has started to put herself “out there more.”
While transitioning from the dual role of co-CEO and co-chief investment of cer to executive chair at the $13 billion alternatives manager in 2016, Page gained “an appreciation for how little capital was being managed institutionally” by U.S.-based diverse talent. What resulted was the 2021 founding of MPowered Capital, where Page is also CEO. The rm, which invests in diverse alternatives managers, closed its rst fund last year with $110 million.
“There is a bene t to being out there and having a stronger voice — using credibility, integrity and staying power for the bene t of in uencing what the next generation of talent looks like,” Page added. “I could have happily stayed back, but
Emerging evolution
I’ve pushed myself to be a bigger voice in the industry.”
In discussions about diverse managers, the term “emerging” may also come up. Emerging managers are “small managers who are super hungry” for capital, and more than 80% of diverse managers are identi ed as such, Trinity’s Tsai said.
Over the past 20 years, there’s been “a huge evolution” in the emerging manager space, and that focus “also includes women (and) diversity as a component of that,” said Mina Pacheco Nazemi, who was honored in the 2023 In uential Women class. She serves as head of the diversi ed alternative equity team at the $409 billion investment manager Barings, which de nes emerging managers as rms in at most their third round of fundraising.
“Diverse managers often have not had the opportunity to manage assets because of historical challenges or biases,” she added. “That is why you see a lot of programs having an emerging or diverse manager component.”
Emerging manager programs have been started to support the launch of new rms. Some states including Illinois and New York have enacted emerging manager-related laws requiring that public pension plans include diversity mandates. State laws and programs meant to support emerging managers may also specify how much capital a rm must have to qualify, with some programs even specifying the threshold based on asset class. Illinois has a maximum of $10 billion, and a minimum of $100 million.
In 2024, diverse-owned rms in the private markets have been targeting a median fund size of $100 million, according to data from Fairview Capital through June 30. The gure for these rms lags against the broader industry, where the median target fund size is $418 million.
Champions of diverse and emerging managers are doing their part to expand access, opportunity
The nonpro t’s educational programs and workshops for emerging venture capital managers consider rms that are at most in their fourth round fundraising and have a fund size no more than $100 million.
Entrepreneurial women
For emerging managers, Tsai said
‘Keep that 1.4% number (percentage of capital managed by diverse groups) in mind because even for people who’ve been in the industry for a long period of time, including me, it’s a stunning underrepresentation — and an opportunity .’ MPOWERED CAPITAL’S MARCIA PAGE
While investors may come up with their own de nition, there is no universal de nition for an emerging manager. But organizations like Venture Forward may try to nd and use a “general sweet spot combination of fund sizes and series to categorize fund managers that overlap in their experiences, challenges faced and opportunities they address,” Executive Director Maryam Haque said.
that “the only way they can survive is to deliver a very differentiated strategy” or offer something unique that allocators are willing to deploy capital to.
At Xponance, an “emerging” rm is de ned as “entrepreneurial in spirit in the way it’s being run,” said Cesar Gonzales, client portfolio manager and director of manager development. The $19 billion wom-
en-owned multistrategy manager was founded by CEO, CIO and 2023 In uential Women honoree Tina Byles Williams.
Women entrepreneurs in particular tend to help each other more than their male counterparts, Gonzales said, given that they “have a different kind of upbringing (and) different challenges.” For instance, when Byles Williams started the rm in 1996, she took a second mortgage on her home.
New rms may receive their rst dollar through platforms like Xponance and Daraja Capital, which also was founded by a woman. CEO and 2023 In uential Women honoree Raudline Etienne launched Daraja to address “a challenge for people of color and women to be in those networks of wealth, and to have friends and family who can write them six-digit checks and help them launch,” noting that “talent is observable at the early stage.”
Page invested $75 million of her own capital to launch MPowered Capital. But the rm wouldn’t be what it is today without Chrissie Chen Pariso, who said “I’m in” when Page only had a “one-page idea of what MPowered Capital would look like” and now serves as managing director. This was before the idea of
developing a rm, creating a fund and coming up with a name, so to have a “remarkable partner in this journey” with everyone who’s come along since, “it’s incredible,” Page said.
Foot in the door
Some allocators may require managers to have a minimum threeyear or ve-year track record,” which for their portfolio “means it will be dif cult to include or recommend any diverse or emerging managers,” Tsai said. Although these rms may not have a long track record to underwrite, she noted that “if you know how to underwrite emerging managers, they can actually outperform established managers.” Emerging managers still face some stigma, so they have trouble “getting a meeting,” Pacheco Nazemi said. Allocators may have “felt like it was too risky, but I think it’s taken these two decades to really get comfortable — and frankly, because they realized they missed out on really strong performance,” she added. Another challenge, particularly around the diversity side or women side, is “there’s just been a lot of bias around that” since these managers “don’t look the part,” she noted. Ideally, emerging rms graduate from platforms to limited partners’ larger portfolio. But if there’s no allocation for a particular asset class or style of investing within it for the manager, “there’s really nothing they can do,” Gonzales said, which is why Xponance encourages new rms to start strategies around what the larger portfolio is seeking.
Capital allocation
Public plans invest in emerging and diverse managers since “there’s a focus on racial and gender equity within their portfolios” and “making sure that their portfolios are a re ection of the demographics of their state,” Barings’ Pacheco Nazemi. This year’s In uential Women honorees who support diverse and emerging managers in the public pension space include Taf Ayodele, who — as director of DEI and emerging manager strategy for the bureau of asset management for the New York City comptroller’s of ce — works with these managers at the $274.4 billion New York City Retirement Systems. On her road to becoming senior investment director of sustainable and impact investing research at Cambridge Associates, Chavon Sutton held and inaugurated the role currently held by Ayodele. Within the asset manager space, Gennell Jefferson has contributed, too. On her road to becoming partner in investor relations at the $7.1 billion Vistria Group, she led GE Asset Management’s diverse and emerging manager program and deployed more than $1 billion in capital to diverse rms.
“It’s not an understatement to say that the work that Gennell has done during the tenure of her career has
Jim Frazier/The iSpot
pushed diversity forward,” said DeAnna Ingram Jones, consultant at NEPC and president of the Chicago chapter of the National Association of Securities Professionals, of which Jefferson is a member.
“Diverse professionals owe her a debt of gratitude for all that she has done to welcome and support diverse talent in nancial services,” Ingram Jones added.
Some endowments and foundations emphasize diversity goals in the hiring of investment consultants and asset managers.
For members of Trinity’s investment committee, their mission is to deploy capital to fund the church’s mission in housing, homelessness and racial justice. The endowment doesn’t have a speci c ESG or DEI target, but the capital in the private equity portfolio that Tsai helped to build in 2018 has more than a third of it allocated to managers with 50% diverse ownership.
The portfolio is “still rather young,” Tsai said, when “compared to the benchmark from many angles, but it has achieved top-tier returns” through both portfolio construction and manager selection. Over $800 million in capital has been deployed from the portfolio, with the J-curve effect alleviated through co-investments
and secondary purchases.
Making connections
Some of this year’s In uential Women participate in programs connecting diverse managers with allocators.
Lauren Mathias said she’s been proud of the contributions she and her fellow research specialists “have been able to provide the diverse and emerging manager community” through the Callan Connects program. She serves as senior vice president of global manager research and diversity, equity and belonging champion at the $4 trillion investment consultant.
Started in 2010, Callan Connects works to “identify, research proactively and ultimately recommend diverse and emerging managers” for clients, Mathias said. Responsible for organizing the program’s quarterly meetings, she noted that she’s “gained a lot of understanding of what it’s like to be an entrepreneur and how hard it is.”
“Being proactive as a large institutional consulting rm takes the weight off some of these organizations just starting, and you can provide them some advice and help them,” she added.
Venus Phillips, managing director of the $4 billion Kresge Foun-
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dation, is a founding member of the Black Limited Partners Association. Formed during the COVID-19 pandemic, the group’s mission includes “investing in diverse and emerging managers, as well as helping to build the pipeline for diverse individuals in the industry,” she said.
Saint Paul & Minnesota Foundation CIO Shannon O’Leary works in and makes commitments in this small world. The $1.8 billion endowment is a member of Institutional Allocators for Diversity, Equity, & Inclusion, a consortium that was co-founded by Tsai.
Founded following George Floyd’s death in 2020, IADEI’s mission is to help connect investors with diverse managers, of which it maintains a database of more than 1,300. The organization holds bimonthly virtual meetings, in which between 80 and 100 allocators on average listen to pitches from six rms.
But the effort to advance diverse and emerging managers is “a hard business,” Mathias noted. “In many situations, it works out. In others, it doesn’t.” Still, for her, “being part of something over 14 years has allowed these organizations to be heard and hopefully succeed,” and she’s proud to have done this and not alone.
Dina DiLorenzo
President, Guggenheim Investments
With over 25 years of experience in the nancial services industry, Dina DiLorenzo has served in many roles. Her work at Guggenheim Partners, however, is perhaps the most career-de ning part of her path to date.
She joined the rm in 2005 when it was under 50 people in total and has watched it grow into the global asset management brand it is today with about 2,200 employees.
“One of the main reasons why I wanted to go into nancial services was because you could provide solutions to complex problems and ultimately engage with and help people,” she said. “Those have been important drivers of my career, and de ne how I see my role at Guggenheim.”
Guggenheim one of the few women-led institutional asset management rms. Under DiLorenzo’s leadership, the rm has grown its assets under management from $218 billion at the end of 2022 (which marked her rst full calendar year as president) to $231 billion at the end of 2023.
She is also focused on several sustainability and inclusion initiatives.
DiLorenzo chairs the Guggenheim Investments Sustainable Stewardship Council and is a member of the Guggenheim Partners management committee and nance and planning committee, as well as the Women’s Innovation and Inclusion Network. She is also a principal sponsor of Guggenheim’s Veterans Transition Assistance Program.
DiLorenzo has been president of Guggenheim Partners since 2021, working alongside Chief Investment Of cer Anne Walsh — making
“It’s critical for successful corporations to have a diverse set of perspectives,” she said. “I also think it’s important to provide resources and education about the different roles available in nancial services so that different types of people can join the industry and ultimately succeed.”
BAILEY M c CANN
While our inve ment approach is time-te ed, our learning is never done.
Kate ElHillow
President and chief investment of cer, Russell Investments
During her 25-plus years in nancial services, Kate El-Hillow has seen a bit of everything.
She was in Japan during the Asian credit crisis. She witnessed the global nancial crisis from a different role in London. She’s worked with private equity teams
IN INSTITUTIONAL INVESTING
investing in new companies and as a duciary where she could take the long view about investing and focus on client service.
All of these experiences helped shape how she approaches her current role as president and chief investment of cer at Russell Investments. At Russell, she oversees all aspects of the company’s investment division, including asset management, implementation and research.
“Few industries give you the opportunity to explore so many different pathways and see the world,” she said.
Anne-Marie Fink
Private markets and funds alpha chief investment of cer, State of Wisconsin Investment Board
Anne-Marie Fink needs to “constantly (have) the energy” to do her job as the chief investment of cer for private markets and fund alpha for the $156 billion State of Wisconsin Investment Board. In this role and throughout her career, she has had the ability to “travel and seek out opportunities pretty much across
Prior to joining Russell Investments in 2021, Kate served as deputy CIO of multiasset solutions for Goldman Sachs Asset Management, where she helped lead the rm’s multiasset investment process and investment team for more than 16 years. Before that, she spent eight years at J.P. Morgan Chase & Co., where she held a variety of investment positions, including a dual role as client portfolio manager and chief operating of cer within the rm’s asset allocation business.
the globe.”
“You have to be energized by the information overload, which at times can be a little overwhelming,” Fink added. “It’s not for everybody, but I nd it very energizing.”
Studying humanities at Yale University allowed her to develop a “cross-disciplinary view.” Taking on marketing-type roles after graduation led her to enroll at Columbia Business School.
Fink’s investing career began at J.P. Morgan Asset Management, where she spent 11 years as a buy-side equity analyst. She took what she calls a “little entrepre-
Her work has given her a global mindset and a willingness to entertain a variety of perspectives. At Russell, she put her mindset into practice by spearheading several diversity and inclusion efforts including the rm’s 10x10 initiative, which analyzes how investors and asset managers view topics such as DEI, sustainability and performance. These ndings have led to new recruitment programs at Russell that aim to reduce bias in the hiring process. BAILEY M c CANN
neurial sabbatical” to write “The Money Maker,” a book on general management from an investor’s perspective.
Returning to the rm, she ran the hedge fund portfolio for the private bank division for nearly ve years before being named CIO of the Rhode Island Employees’ Retirement System, Providence.
Fink stepped away from the allocator side, staying in the state to learn “a little bit about high net worth” at a multifamily of ce. Then, before moving to Wisconsin, she focused on alternative investments as a portfolio strategist for corporate pensions at State Street
Global Advisors’ Stamford, Conn., of ce.
Fink’s accomplishments since joining SWIB in 2019 include adding around $2 billion in outperformance for the portfolio, and adding the separately managed account Dockside Platforms to mimic hedge fund strategies.
“I’ve never been one to have a grand plan for where my career was going to go,” Fink said. “It’s been more a little bit opportunistic, and responding to where I saw the opportunities. The fact that it turned out pretty well in the end is great.”
Congratulations to Acadian CEO KELLY YOUNG
for being recognized as one of our industry’s Most Influential Women. We’re proud of Kelly’s leadership and delighted to be counted among such an inspiring peer group.
CARYL ANNE FRANCIA
Kourtney Gibson
Senior executive vice president, chief institutional client of cer, TIAA
Of all the great mentors and sponsors who have crossed Kourtney Gibson’s life, one especially stands out: her cousin, James Reynolds, founder of Loop Capital, a preeminent privately held investment bank.
“Jim made sure that I was in the room when things were happening,” Gibson said, referencing the song in the Hamilton Broadway musical, “The Room Where It Happens.”
“Looking back on that exposure and those opportunities, I’m forever grateful for that,” Gibson, senior executive vice president and chief institutional client of cer at TIAA, said of her time at Loop.
Her 20-year career at the rm started when she was just 16.
Being from Racine, Wisc., Gibson knew nothing about Wall Street, saying investment banks were not prominent in the Midwest, but she accepted Reynolds’ invitation to work at Loop nonetheless.
Jeanmarie Grisi
Head of global pensions, Nokia
O“I just knew he was going to pay me a nice little amount that was more than the minimum wage that I was making at the shoe store I was working at,” she said, recalling the 16-year-old self who had planned to be a pediatrician.
“It sucked me in,” she said of the business of nance.
Reynolds reinforced what she had long learned from her mother about giving back.
Gibson recalls how Reynolds and his partner contributed the check they received for their rst bond underwriting deal with Chicago Public Schools.
Rather than using the money to celebrate over a lavish meal, they took “that rst check and donated it,” Gibson said.
Gibson connects her experience at Loop to TIAA, where she runs the company’s core business, retirement solutions, which accounts for $740 billion of TIAA’s $1.28 trillion in assets under management.
“It really does tie back to this mission of serving those who serve others,” she said, alluding to TIAA’s status as the nation’s leading retirement services provider to nonpro ts.
MARGARIDA CORREIA
Nickol Hackett
CIO and treasurer, The Joyce Foundation
ne of the more dif cult aspects of Jeanmarie Grisi’s job as head of global pensions at Nokia — overseeing more than $38 billion in assets — has to do with the hiring, retaining, replacing and “looking out for your team … because you’re an island within the corporate world,” she said. That means “there’s a lot of advocating for your team.”
And while it’s important to have a mentor and support behind you, it’s also important to “advocate for yourself. It’s a very hard thing for some women to do — but the worst thing people can say is ‘no.’ But you have to get used to ‘no’s anyway, everywhere in your life — don’t be afraid to hear the ‘no,’ that’s the challenge for the next time,” Grisi said.
Alongside her role at Nokia, Grisi was in 2022 reappointed by President Joe Biden as a member of the Pension Bene t Guaranty Corp. advisory board — and was at that time also named as committee chair.
Although she’s been in pension fund roles for more than two decades, including as U.S. CIO of Alcatel-Lucent, Grisi describes her route to retirement plans as “meandering.”
She started her career in public accounting and then moved into the nonpro t world. Along the way, she’s balanced family and work — and is an advocate of other women doing the same.
“My family is really important to me — it’s part of who I am. I think it makes me a better supervisor, colleague. I’d like to put that out there: You can do both, for women who get concerned that somehow that holds them back.”
Nickol Hackett, chief investment of cer and treasurer of the $1.2 billion Joyce Foundation, Chicago, loves nding rare talent.
This love not only applies to the way she selects the staff members to work on investing the foundation’s assets, but in how she selects managers and even how she spends her free time.
The Joyce Foundation supports public policies and invests in strategies that advance racial equity and economic mobility, providing grants in the Great Lakes region.
really talented people who want to both build and deploy their skill set.”
This applies to staff, and the investment managers with which the foundation works. Hackett sees DEI as a re ection of her desire to nd rare talent in places others haven’t looked.
“I’ve always liked the kind of purpose and mission alignment of investing,” said Hackett, who is the former executive director and CIO of the Cook County Employees' Annuity & Bene t Fund and the Cook County Forest Preserve District Employees' Annuity & Bene t Fund, both of Chicago. “It really helps in terms of being able to attract
Executive vice president and global chief investment of cer, State Street Global Advisors
Lori Heinel credits her Princeton undergraduate degree in religion with helping her better perform her duties as executive vice president and global chief investment of cer at State Street Global Advisors, overseeing the Boston-based rm’s $4.4 trillion in client assets.
While driven by intellectual curiosity, the grounding that academic choice provided has proven “incredibly useful” in managing SSGA’s 600-person team, and of ces in environments as diverse as Saudi Arabia, Japan and India, Heinel said.
A global role demands “a lot of cultural sensitivity,” and the appreciation of cultural dynamics the study of religion fosters has
Marisa Grant
Board member, Inatai Foundation
For Marisa Grant, mission is what matters.
Throughout her 20-plus years in the industry, she’s worked to help secure retirement for public school teachers, facilitate the nancing of affordable housing in South Africa as a vice president of Musa Capital Advisors in Johannesburg, and, in her very rst role, ensure that endowments earn the needed returns to ful ll their goals as a consulting associate at Cambridge Associates.
Now a board member at the more than $2 billion Inatai Foundation and a member of the board of its investment management subsidiary in Seattle, Grant is working to help the foundation achieve its mission: supporting local groups focused on equity and racial justice in the state of Washington.
Before Inatai, she was the CIO of the $10.7 billion xed-income manager Pugh Capital Management. She joined the Seattle-based rm in 2020 as a senior investment strategist, was promoted to co-CIO a year later, and was named sole CIO in April 2023.
She also serves on the investment committee of the Museum of Contemporary Art, Chicago.
“I love the art space so much because it’s just like identifying rare talent, and I think that’s very much what you’re doing in the art space,” said Hackett. “You’re identifying passionate, committed artists who have a strong point of view in their expression.”
“And that point of view is not building models into bringing returns, it’s really creating masterworks that are meant to shift perspective.”
“I think that just keeps me driven. It keeps me inspired,” said Hackett. “It also keeps me humble, and I think I apply that humility to everything.”
ROB KOZLOWSKI
helped her to “meet people where they are” and nd common ground where possible.
As a “math nerd,” meanwhile, Heinel took a series of advanced math courses in parallel, and upon graduating decided she would dip her toes in the waters of Wall Street for a few years before going on to law school.
Instead, she “got the bug,” and two years stretched into four decades.
Grant cites building trust among clients and staff as one of her biggest accomplishments at Pugh, which she left earlier this year and then joined Inatai. Before Pugh, Grant was CIO of the Montgomery County Public Schools. She joined MCPS in 2013, rst as an analyst, then receiving promotions that led to her being named CIO of what’s now a $2.3 billion de ned bene t plan and a $2.1 billion DC plan, according to P&I data.
Throughout her career, Grant said the common thread is helping the ultimate bene ciaries.
“If it’s retirement security, if it’s a pension fund we’re working with, if it’s the students, professors, administrators at a university foundation … the goal I have for myself is to never lose sight of those individuals and entities. I think the work that we do is so incredibly important.”
JULIE TATGE
Over her past decade with SSGA, Heinel said she’s focused on “divining the future of investing” — working to revamp key product segments at the rm, including ETFs, smart beta, thematic and outcome-oriented strategies. Her other top priority, Heinel said, is making a difference when it comes to gender diversity, with a focus on taking a more systematic approach to mentoring and supporting women in the industry.
“I thought we have to have intentionality around it,” moving beyond mentorship to “advocacy” — identifying candidates, for example, who “could be ready for stretch assignments,” Heinel said. That approach has succeeded in lifting the proportion of women in Heinel’s top leadership team to 50% at present from 30% a few years ago, she said.
DOUGLAS APPELL
Lori Heinel
A look into the future: The inaugural class of Rising Stars in institutional investing
Taylor Abbey V ice president, institutional marketing
Samantha Braham I nvestment associate S LR Capital Partners
Kate Brassington
S enior portfolio manager
global equity P ublic Employees
Association of New Mexico
Sukari Brown Gaylor I nvestment director C ambridge Associates
Jessica Carlson
A ssociate, investor relations
L ucid Management and Capital Partners
Christine Chang
I nvestment of cer, diversifying strategies
H awaii Employees’ Retirement System
Lisa Chang
Former vice president, global opportunities
aktree Capital Management
Angela Chen Portfolio manager
Public School
Retirement Systems
Sabrina Ciampa P rivate markets analyst
eketa Investment Group
Mackenzie Clark
R esearch analyst, senior associate I mpax Asset Management
Clodagh Coghlan M anaging director S tepStone Group
Emily Detz I ntermediate investment professional (public markets)
Public School Employees’ Retirement System
Jin Dingmore
irector of investments
aylor University
Marissa Dyrdahl
S enior vice president
Macy Fallico R esearch analyst
Rachel Groves I nvestment analyst
Public School Employees’ Retirement System
Emily Hahn S enior xed income manager researcher A on
Ananya Handa S enior investment associate T he Harry and Jeanette Weinberg Foundation
Devin Holland
S enior analyst and partner
anger Investment Management
Claire Illo I nvestment of cer
regon State Treasury
Allison Johnston
Jacqueline Kerns
Alexis Lewis
Lessard
Luhrsen
Marco
Nardone
Members of P&I’s 2024 class of Rising Stars re ect on inspiration, career goals and the importance of mentors
Pensions & Investments asked members of this year’s inaugural class of Rising Stars to share their observations on the importance of female mentors, what sparked their interest in pursuing a career in the industry and their goals. What follows is a selection of their responses.
Taylor Abbey , Ariel Investments: I was rst introduced to nancial services through a Smith College alumna and mentor. I was attracted to the dynamic nature of the industry and opportunity to make a difference in society. When I look back on my career in 30 years, I hope to say I challenged the status quo and opened doors for those coming behind me.
Sukari Brown Gaylor , Cambridge Associates: Relationships with senior women are invaluable; they’ve provided guidance and inspiration for my own career. From them, I’ve learned how to improve my strategic thinking, how to make informed decisions under pressure and the importance of advocating for oneself and others.
Devin Holland , Ranger Investment Mgt.: Growing up in a lower-income Black community while attending school in an af uent neighbor-
hood made me hyper-aware of wealth inequality. My goal is to help low income, minority communities gain access to resources that assist them in sustainably building wealth.
Rachel Groves , Pennsylvania Public School Employees’ Retirement System: Female investors achieving organizational and industry success are often intellectually curious, not afraid to challenge the status quo, and embrace diverse thoughts and perspectives to holistically inform their decision-making. I aim for these attributes to be both a better team player and investor.
Ananya Handa , The Harry and Jeanette Weinberg Foundation: I’ve bene ted from women senior to me being generous with their time and advice, guiding me through professional (and personal) implications of career transitions. They provided constructive feedback on brand building and amplifying my voice. Others, like my former and current CEO, have shown me how to lead by example through both kindness and strength.
Natalya Sanghvi , Stardust Equity: I took a course with Professor Robert Shiller. I didn’t expect it would set my career trajectory. My assumption of nance was a system designed
Relationships with more senior women carry hidden gems. Gems I’ll always carry: Always have a basis for your decision(s). Pave your own path. Be your best friend. Boundaries are powerful.
Adekemi Sodamade , NISA Investment Advisors
to oppress. The course showed me that actually the tools of nance could be applied to achieve the opposite — equity and prosperity. I knew I wanted to be part of that.
Andrea Tecson , Avila Real Estate Capital: Real estate has always been my passion. I was captivated by real estate’s unique blend of tangible assets and strategic complexity. I aim to expand my network, make a signi cant impact on the relationships I build, and inspire
women of color in private equity. Jin Dingmore , Baylor University: While all relationships are valuable, having a female who has walked the path before you provides a connection that other relationships cannot. There are challenges speci c to being a female in the nance industry, and it is empowering to see and connect with senior women who can provide counsel/serve as an example on the professional and personal front.
Tracey Nilsen-Ames , Man Numeric:
Senior women have been very helpful in exploring options for delivering your ideas as a woman in a male-dominated environment. At the core of this advice is to advocate for yourself regardless of the audience, jump at all opportunities, and hone the skill of knowing what’s worth ghting for.
Sabrina Ciampa , Meketa Investment Group: My mother inspired me to enter the investment industry. She worked in the industry for 30-plus years and I have seen rsthand the amount of drive and dedication it takes to be a successful woman in this industry. Female relationships in the workplace have been critical to helping me. These relationships provide a true sense of community as we continue to face bias in the workplace. The best lesson I have learned is to always speak up for yourself and your female colleagues.
•
• Modern Portfolio Solutions: In today’s dynamic market, we believe alternative investing is more crucial than ever. Our collection of strategies aims to provide differentiated access to the private markets for a variety of investors, aligning with your investment needs. 1 As of June 1, 2024.
Jean Hynes
CEO, Wellington Management
Jean Hynes, the rst woman CEO in Wellington Management’s 96-year history, said she never shied away from taking on leadership roles, even in high school and college, where she served as dorm house president her senior year.
Hynes says her “leadership journey” at the storied $1.25 trillion, Boston-based money management rm began with an act of volunteerism.
Fourteen years before she took Wellington’s helm in 2021, top executives asked for a show of hands by colleagues willing to go to London to establish an investment beachhead at the rm’s rst overseas of ce there.
“We almost fell off our chairs,” Hynes remembered. It was just so different from “how we described ourselves” as a Boston-centric rm.
In the end, Hynes was the only member of her healthcare team to raise her hand, embarking on what she called years of critical skill building that set her on a path to become one of the rm’s three managing partners by 2014 and then CEO seven years later.
In London, “my role was (to help) the rm gure out how to collaborate across distance and time zones” — increasingly key for a rm with 30% of its employees now based in EMEA and APAC.
Overseas expansion led to another change spearheaded by Hynes, who continues to lead the
Wellington team overseeing $57 billion in healthcare-focused strategies — transforming a rm that had kept itself almost hermetically sealed from the public into one of the world’s more open money managers.
“As we expanded our wealth offerings in Europe and Asia … the feedback we got from our partners is that the world needs to know who you are,” Hynes said. Wellington’s “opening up to the world” was aimed both at helping those clients and better attracting talent around the globe, she said.
DOUGLAS APPELL
Yesterday’s ideas won’t cut it in today’s world.
Gennell Jefferson
Investor relations partner, The Vistria Group
Gennell Jefferson, currently partner in investor relations at Vistria Group, has dedicated her career to the pursuit of inclusion and diversity in the investment industry.
Prior to joining the Chicago-based private investment rm in 2022, Jefferson held the position of managing director, private equity and business development, at State Street Global Advisors, via the 2016 acquisition of GE Asset Management, for ve years. While at State Street, she led a rmwide effort to increase diversity in the nancial services industry that led the rm to partner with A Better Chance, a nonpro t organization helping more young people of color become well-educated by attending high-achieving boarding, day, and public schools in the U.S.; the Toigo Foundation, where she serves as a board member; and
the National Association of Securities Professionals.
In nominating Jefferson for IWII recognition, Greg Hartch, senior vice president and global head of ETF strategy, planning and infrastructure at State Street Global Advisors, wrote that Jefferson is a “champion of diversity, equity and inclusion,” describing her efforts to create a diversity and inclusion dialogue for members of the team as a response to George Floyd’s killing in 2020.
At GE, she founded and led a diverse and emerging manager initiative that saw the rm partner with many leading minority-owned private equity, real estate and private credit rms.
Jefferson is also an active board member of the Francis W. Parker School in Chicago, where she serves on several committees — an important passion she pursues while remaining a leader in the private equity industry, according to Hartch.
The Vistria Group had $7.1 billion in assets under management as of March 2023.
Unprecedented challenges require unconventional solutions. Discover how our unique perspectives and long-term, opportunistic approach help us to be there for clients no matter the market environment.
ABIGAIL PARROTT
Ari Oshinsky
Katherine Jollon Colsher
CEO and president, Girls Who Invest
Finance is “a hard industry to be in regardless of gender. It’s very demanding in terms of the pace and the cognitive diversity,” said Katherine Jollon Colsher, president and CEO of Girls Who Invest.
Since joining in 2020 from the philanthropy Goldman Sachs 10,000 Small Businesses where she was a national director, Colsher said she was inspired by the Girls Who Invest mission, which is to educate through a hardcore nance curriculum and provide internships for women undergraduates. She herself earned a bachelor’s degree from the University of Richmond and serves on the Milken Institute’s Inclusive Capitalism Executive Council.
“What compels me is young women’s access to opportunity. We work with populations that are underrepresented, and change can be catalytic. Connecting these
Deborah La Franchi
Founder and CEO, SDS Capital Group
Only six years after graduating from Georgetown University with a master’s degree in public policy, Deborah La Franchi launched SDS Capital Group in 2001 with “a mission of engaging the private sector in the battle against poverty,” she said.
Today, La Franchi continues to serve as CEO of the impact real estate fund manager, which now has $1.3 billion in assets under management.
SDS uses “private-sector capital to invest in housing or economic development projects in the country's lowest-income communities,” she said, which has recently included some capital from public pension funds.
La Franchi started out her career at the Los Angeles mayor’s of ce, where she eventually became assistant deputy mayor for economic development. She then helped launch Genesis LA, which she described as “one of the country's rst double bottom line funds,” now known as impact funds.
Through her work at Genesis LA, where she served as president and CEO, La Franchi “had an epiphany” about her career path, she said, that led her to start SDS Capital Group. At SDS, the 27-person team is predominantly women and minorities, “so we are a bit of a unicorn in that way,” according to La Franchi.
One of the company’s core values is diversity because “diversity of thought brings more ideas and options to the table, and ultimately positively enhances our performance,” she said.
Through SDS’ internship program, “we very intentionally try to create pathways for women and minorities,” La Franchi added.
COURTNEY DEGEN
IN INSTITUTIONAL INVESTING
women to the investment industry really mobilizes their career paths and the rms to change from within.
GWI founder Seema Hingorani, who is a managing director at Morgan Stanley, is “so committed. One of her special gifts is she treats each class like the rst,” said Colsher.
Founded in 2015, Girls Who Invest boasts over 2,500 alumnae, and placed 1,335 young women in investment internships. Roughly 1,200 alums are working full time, with more than three out of four working in nance.
“It’s not lost on us that after going through Girls Who Invest, our young women go into an internship, the industry still doesn’t have the gender diversity we’re all striving for. It’s a strong male presence. They rely on male leadership.”
Notable alums have gone on to work at rms such as at Oaktree Capital Management and Goldman Sachs. Another alum who graduated from GWI’s rst class in 2016 and is now at alternatives manager Wafra, “recently went on vacation with a group of her friends from Girls Who Invest,” said Colsher. “That’s a powerful network.”
ERIN ARVEDLUND
Raelan Lambert
Global alternatives leader, Mercer
When Raelan Lambert was 12 years old, she wanted to be president of the United States.
“I’ve always been ambitious,” Lambert said. She switched from pre-commerce at the University of Virginia to pre-medicine, but “realized I do not have the stomach for medicine” and moved back to a path that led her to a role at Goldman Sachs.
“I thought I’d bombed the interview — the last question they asked me was ‘why should we hire you?’ I blurted out ‘because you’d be a fool not to.’”
And she got the job.
Although she says she was a “ sh out of water” in her new company, she thinks being a little naïve has actually bene ted her career.
For example, in preparation for a meeting on Y2K, she assumed her boss wanted her to actually present to senior partners. He
Jennifer Koelle
Senior investment of cer, Illinois State Board of Investment
First, Jennifer Koelle wanted to become a ballerina. And then a doctor, even preparing for it by starting college at the University of Pennsylvania on a biomedical engineering track. And then, randomly, she said, she took a few economics classes.
“I thought they were really fascinating and really interesting and kind of blended, you know, there's the math, there's the analytical piece of it, but there's a lot of behavioral nance and humans and sociology and kind of how economies function,” she said. “It just checked a lot of boxes of things I thought were really interesting.”
range of how you can deploy capital,” she said.
About four years ago, Koelle decided her next step was to become part of the actual portfolio team, which is how she ended up at the $31.5 billion Illinois State Board of Investments, overseeing its public markets portfolio.
She switched to the liberal arts college to study economics and international relations, and after graduating, she spent more than 10 years doing manager research for Mercer.
“I loved that I got to meet with so many different asset classes and managers, and you got so much exposure to just the full
Alena Kuprevich
Managing director and partner, Disciplina Group
Creating a boutique investment rm with the feel of a large entrepreneurial business and at its heart providing years’ worth of knowledge to smaller asset classes seems like the best of both worlds.
But at Disciplina Group, an independent outsourced chief investment of cer rm, it does just that, helping resource-constrained institutional investors, including university endowments and charitable foundations.
Alena Kuprevich, managing director and partner, was one of the founding members of Disciplina, along with Matthew Wright, president and CIO. Kuprevich was managing director of private investments at Vanderbilt University’s Of ce of Investments in Nashville while Wright was CIO.
“Myself, Matthew and Brant (Smith) have worked together for over 20 years,” Kuprevich said. “While at Vanderbilt, I
allowed her to do so, and that naivety, ambition and self-belief — “I just don’t question the fact that I belong or that I have a right to be at the table” — has contributed to her high-pro le role. “I see an objective and see something that I know will bene t the rm, colleagues or the industry, and I go for it,” Lambert said.
And while her career hasn’t necessarily taken her to the White House, it has taken her to Tokyo, Hong Kong, and now California, for her current role as global alternatives leader at Mercer. She manages more than 260 professionals across 32 of ces worldwide. Mercer has a total $16.2 trillion in global assets under advisement.
While there, she said she’s been especially proud of how the board has used its diverse broker program as a model on the private market side for the use of diverse-owned investment banks.
“It's something that they're well aware of that no other pension had really done, no other asset owner has really done, and we're really on the forefront of that in terms of kind of opening that conversation for how people could do more and do better and have bigger pools of partners with whom they work and guide better outcomes,” she said, adding that two years ago, the board adopted the policy to encourage its private market managers to use diverse-owned investment banks when possible. “We’re really, really proud of that.”
ERIN CHAN DING
found I wanted an opportunity that combined an entrepreneurial feel with the knowledge I had gained during our ve-year tenure.”
In 2013, Kuprevich said it felt like the right time, and Disciplina Capital Management was founded.
“I always said to myself then and even now, do what you have to do to do what you want to do,” she said. “At its heart, our work is closely associated with university endowment, hospitals and charitable organizations.”
Disciplina uses high level asset allocation to make recommendations of investments, manage selections and the day-to-day running of its clients’ investment of ces.
“In this industry, I found it’s important for them (women) to nd their own style of communication,” Kuprevich added. “I personally would say conviction, voice and due diligence are part of my style of communication with clients ... it's all about building trust and talent in this industry.”
ABIGAIL PARROTT
limited partners to maintain or accelerate the pace of their diversifying allocations to private markets, resulting in clients maintaining strong risk-adjusted performance across more than $50 billion in existing allocations.
And her contributions to the promotion of underrepresented groups is evident in her co-founding Mercer’s Leap Continuum — an inclusive strategy for clients focused on global private markets women or diverse-led and -owned investment strategies that advance diversity, equity and inclusion, while pursuing competitive, risk-adjusted net-of-fee returns.
Her contributions to the private markets business were evident in work during the COVID-19 pandemic, where she helped
It's important to think ahead — “like playing chess,” roll up your sleeves and get involved as a leader, and to prioritize “the things that make you happy,” Lambert said.
Kathleen Lutito, who retired in May from her role as president and chief investment of cer of Lumen Technologies’ CenturyLink Investment Management, has picked up some useful advice over the years including this: Share good news fast but bad news faster.
“That builds trust and … it’s good for the relationship because they know that, hey, anything bad I know Kathy’s going to be in my of ce,” said Lutito, who assumed the president and CIO role in 2006 at what was then known as Qwest Asset Management.
She put that advice to work in 2008, shortly after Qwest Communications International hired a new CFO (Centu-
Lauren Mathias
Senior vice president, global manager research, and diversity, equity and belonging champion, Callan
It’s one thing to make a whole career at one employer. It’s another to be employed as a champion.
Lauren Mathias will soon celebrate her 20th anniversary at Callan, where she started as an analyst in October 2004 after studying accounting and nance at California Polytechnic State University, San Luis Obispo.
She now holds two titles at the $4 trillion San Francisco-headquartered consulting rm, including senior vice president of global manager research — speci cally looking at non-U.S. and global equity. On top of that, she leads the Callan Connects effort to support diverse and emerging managers.
“I started my career at Callan and didn’t think about the future. It’s not until you look back that you really take note of
IN INSTITUTIONAL INVESTING
Rayna Lesser Hannaway
Head of team, portfolio manager and analyst, Polen Capital
Growing up, Rayna Lesser Hannaway saw her mother as her hero. When her mother graduated as one of three women in her law school class in 1967, “that really showed me that I could be different,” Lesser Hannaway said.
Now head of team, portfolio manager and analyst at Polen Capital, Lesser Hannaway said she aims “to help women at every turn.”
That includes her work on Women Inspiring Success and Engagement or WISE — Polen Capital’s employee resource group that she co-founded.
Lesser Hannaway said that leading that initiative “was really exciting to me in terms of really bringing together the women inside of Polen Capital, but then also creating this united front that put us in a great position to attract other women to Polen Capital, and to also be a role model inside of the asset management business for women.”
Another initiative that Lesser Hannaway established is the Women's Leadership Council, which helps “create the right relationships” for women in the rm and provides them with more networking opportunities, she said.
Lesser Hannaway thinks the industry needs more people “to step up to the plate” and bring women along with them, which includes serving as their champion and sponsor, she said.
“Women need mentors and sponsors” as well as role models that show them that it’s possible for women to succeed in the industry, she said, and she aims to serve as a role model for others.
Polen Capital manages $65 billion in assets.
ryLink acquired Qwest in 2011 and was renamed Lumen in 2020). Lutito met him and indicated that discussion of the pension plan could wait until after he had settled in.
“And then the nancial crisis happened, and it looked like we might have to make a contribution, we might become underfunded,” she said. “I had to go and make sure and say … hey, I think we need to talk a little bit sooner. … I just don’t want you to be surprised if you need to come up with some money.”
Though she has stepped away from her CIO role overseeing about $12 billion of Lumen retirement plan assets, Lutito continues to be a member — and chair of the investment committee — of the board
why you’ve stayed,” Mathias said, pointing at the wide range of responsibilities and opportunities she has been given to contribute. “I’m always striving to accomplish something, be more helpful or add value in some new or different way — whether at the rm or in my personal life,” she added.
Mathias’ second title is diversity, equity and belonging champion — which is “not like a head of DEI from the top down,” she noted. As the champion, she deploys the internal ve-year DEB strategy created by colleagues.
Outside Callan, she serves on the board of the Investment Diversity Advisory Council. She also champions the hearts of her three children, who make her “excited to wake up in the morning.” Support from her colleagues, her husband, parents and grandmother — whose memories and legacy help her “keep pressing forward” — help her get through tough days.
CARYL ANNE FRANCIA
COURTNEY DEGEN
of trustees of Lord Abbett’s U.S. mutual funds. Lutito also serves as an external investment committee member for two other large corporate plan sponsors, Exelon Corp. and Chevron Corp.
Lutito opted to move on from the CIO role in order to have time for other interests, including travel. In fact, she recently went to Spain where she walked the Camino de Santiago.
And Lutito didn’t waste any time in shifting from work at CenturyLink to the new chapter in her life.
“May 3 was actually my last day of work, and I was on a plane to Spain that day,” she said.
KATHIE O’DONNELL
Kathleen McCarragher
Managing director, head of growth equity, Jennison Associates
Few portfolio managers in the industry have had a tenure as long as Kathleen McCarragher, managing director and head of growth equity at Jennison Associates. Prior to joining Jennison, she held investment roles at State Street Research & Management and Weiss, Peck & Greer.
She joined Jennison in 1998 and manages the rm’s agship large-cap growth strategy, leading an investment team of 15 spanning several sectors, including technology, consumer, nancials, healthcare and industrials.
As of June 30, Jennison had $210 billion in assets under management.
Vivian Lin Thurston
Partner and portfolio manager, William Blair
Investment Management
According to Vivian Lin Thurston, “the biggest bene t of diversity … is cognitive diversity,” which is especially important for investment management, as more perspectives lead to better decision-making.
That’s why she continues to be an advocate for diversity and serves as chairman of the board for the Chinese Finance Association of America, which she co-founded in 2009 with other Chicago professionals.
Originally from China, Thurston moved to the U.S. in 1996 to attend the University of Illinois Urbana-Champaign, where she earned two master's degrees: one in sociology and one in nance.Thurston, now a partner and portfolio manager on William Blair Investment Management’s global equity team, said she founded the nonpro t in the wake of the nancial crisis, when many people lost their jobs.
At the time, Thurston had been in the industry for 10 years, so she felt she could “share that experience and network and (those) resources” with others. “Then it turned out to be quite a rewarding experience,” she said.
The Chinese Finance Association of America organizes monthly events, where topics vary from learning how to interview, how to write resumes and advancing diversity efforts, Thurston said. For example, the organization often hosts seminars where they bring in Chinese female professionals to talk about their career development and overcoming adversity as Chinese women.
On her team at William Blair, Thurston has also organized events for women to share things freely, such as discussing work-life balance, motherhood and the nuances of traveling globally as a female professional.
Chicago-based William Blair Investment Management managed $72.4 billion in assets as of June 30.
COURTNEY DEGEN
create value. It’s exciting to be in a business where I am asked to learn every day.” Forty years ago, there weren’t a lot of women on Wall Street, which put McCarragher in a unique position.
“One way you could stand out was with the work you did. The success of your investment ideas is measurable and you can be rewarded for being an independent thinker. That’s been important to my early and continued success in this eld.” McCarragher is also leveraging that success to help others. As a leader, she gives women “stretch” opportunities to elevate their careers. She's also on the Jennison management team where she sponsors and supports employee resource groups to advance Jennison’s culture and vision.
“As a growth equity manager, I’m very motivated by identifying sources of value and innovation both in the rm and in the companies we invest in,” she said.
“I think this is one of the best businesses to be in,” she said. “Being a growth stock manager means that we are constantly looking forward. We are constantly learning and improving our understanding of our world and how industries
“Many things have changed over the years but the core thesis of being a long-only investor hasn’t changed: Identify true sources of lasting value and the performance will follow.”
Barbara McKenna
President and managing principal, Longfellow Investment Management
When Barbara McKenna rst began her nance career in the mid-1980s, she found an environment that was downright hostile to women.
There was no paid maternity leave at her job. The only option for new parents was to take six weeks off, unpaid.
The chairman, she recalled, said, “I’m not paying for someone to have babies.”
“When I got into the business, it was very male-dominated,” she said. “And behavior had no governance on it. I remember being early on, at my second job, and we didn’t have electronic boards. There was a wall and it was like a giant whiteboard. And I had to go up a ladder, and I would post rates. And there were a lot of comments as I would go up that ladder. There were a lot of comparisons to Vanna (White). There were a lot of discussions about my skirts.”
At the same time, McKenna said she felt fortunate to be hired into a direct nance job;
Ann Miletti
AIN INSTITUTIONAL INVESTING
she also said she had a supportive husband and people in the industry who, “when I was feeling weak, they’d give you the strength, give you advice.”
Nearly 20 years ago, McKenna began at Longfellow, when there were fewer than 10 employees, $750 million in assets under management and no company website. She said she bought about one-third of the rm when she joined, “which meant kind of pilfering my kids’ college fund.”
Now Longfellow has more than 55 employees and $18 billion in AUM. McKenna adds there’s also paid maternity and paternity leave. She says the rm has worked hard to build a team that’s diverse in gender, ethnicity, age, background and experience.
“It’s wonderful to do it because it's the right thing,” she said. “But it’s also the right thing for our clients because in this industry, groupthink is so pervasive. And what we do is hard, and making sure that we have those different perspectives to evaluate risk and opportunity is so important. And that's what really drives us. And I think it's why we have had the results we've had.”
ERIN CHAN DING
Chief diversity of cer and head of active equity, Allspring Global Investments
nn Miletti described her journey to becoming head of active equity and chief diversity of cer at Allspring Global Investments as hard. But as her employer has grown in assets and employees, so has she in con dence, passion and strength.
After racking up more than $200,000 in debt after her son was born with a heart defect, Miletti pivoted from teaching elementary school students to nance, joining Strong Capital Management, where she listened to clients at the call center.
Had she not been nancially strapped, she probably wouldn’t have joined the industry, “but I was curious about it, kept raising my hand” and looked for more opportunities, she said. Over time, she developed “a love for it” and took on “bigger challenges,’’ including portfolio management.
Ever since, she’s worked at the same building in Menomonee Falls, Wisc., staying with the asset manager as it was bought by Wells Fargo and spun off into its present-day independent form with $504.9 billion in assets under management.
Outside the rm, Miletti works with nancial education and mentorship programs aimed at high school students, notably SecureFutures and Diversity Investment Management Engagement, the latter of which was founded by two colleagues, including Deputy Chief Diversity Of cer Sonya Rorie.
While she said she still suffers from imposter syndrome, Miletti has plowed through with a work ethic inspired by those around her — including her father, who would go and work “incredibly hard” even in illness at his blue-collar railroad job.
“Everybody kind of has a plan. You had a bit of a different plan, but there’s curvy roads” Miletti said. “There’s brick walls. There’s cliffs that you go off of — not because you plan for them to happen, but because that’s how life goes. It’s really just how hard do you want it, or how willing are you to work for it? Are you more willing than somebody else? Or are you going to give up?”
CARYL ANNE FRANCIA
Chief investment of cer, Saint Paul & Minnesota Foundation
Shannon O’Leary is “way too outspoken” — at least, that’s what she said her mother thinks. Her daughter is not afraid to “say it out loud,” which is also the title of her “irreverent and (often) funny” newsletter on the investment industry.
Having grown up in Minnesota — where “people have a very hard time talking about money” — O’Leary invites people to share their stories, hot takes and some humor — what she called “the best tool to have in your toolbox.”
PPatricia Miller Zollar
Managing director, Neuberger Berman
atricia Miller Zollar had always known she was good at math. But it wasn’t until college that she found she was “really, really good” at accounting.
“I loved it,” she said. “I love the order of it, the way accountants really think about things really resonated with me.”
She was so sure about an accounting career that she took — and passed — all four parts of the certi ed public accountant exam on her rst try before she graduated from North Carolina Agricultural and Technical State University.
As an accountant, she said, “You see what your leadership skills are, you get a much better idea of what you want to do longer term. Working in accounting really did that for me because you do get a chance to be a leader very early on.”
investments,” and so she went to Harvard University for her MBA, following it up with investment banking and then asset management.
She worked brie y at Neuberger Berman, served as a vice president in Goldman Sachs’ asset management division and then rejoined Neuberger Berman.
In 2007, Zollar founded Neuberger Berman’s NorthBound platform, an emerging manager program that has helped diverse partners and founders build and grow successful funds.
While working as a CPA, Zollar decided she “wanted to be the one that’s creating the
Shannon O’Leary
But the newsletter is on break as O’Leary prioritizes her work as chief investment of cer at the $1.8 billion Saint Paul & Minnesota Foundation.
Ahead of her, she’ll discuss topics including DEI and ESG at the annual conference for the United Nations-support-
Shannon O’Mara
Adecade ago, Shannon O’Mara was hiring for entry-level positions at Loomis, Sayles & Co. and noticed what she called “a distinct trend” in its candidate pro les: Only 18% of the candidates out of about 800 applicants were women.
She compared that to the senior analysts at Loomis Sayles, found that they had about 40% women, and she said, “I thought we were going to have a problem further down the line. So I wanted to do something about it and do something different.”
So, in 2015, O’Mara, co-director of credit research at Loomis Sayles, with $359.7 billion in assets under management, created the rm’s Undergraduate Women’s Investment Network program with the rm’s support to inspire, develop
“You have to go to where the talent is,” she said. “If you believe the talent resides in every community but opportunity does not, then you're going to want to go and make sure that every place … gets represented on your team.”
For women of color who are getting into the industry, she said, “Don’t just assume that this person who doesn’t look like you, that you don’t have anything in common with them. There are more things in common with any individual than things that separate us. You have to know that relationships are built person by person.”
ERIN CHAN DING
working in a “pretty tough environment with all-male hypercompetitive researchers competing for poorly compensated roles.”
A course on the history of banking led O’Leary to graduate with a bachelor’s degree in economics with a specialization in physics, and to work 20 years at wealth management rms including Dearborn Partners and The Advocate Group, before switching to nonpro t work in 2019.
While she can present with humor, O’Leary noted she’s “a deeply serious person.” What she has learned to do over time — as she got older, managed people and accumulated experiences — is to be more con dent, and early career women need to do that much sooner.
ed Principles for Responsible Investment, of which the community foundation is a signatory.
Behind her is the belief that she’d “end up in academia,” having started her studies at the University of Wisconsin–Madison in its physics department. She said she didn’t want to spend her life
and recruit underrepresented groups into investment management. She started the program with 18 students from Bentley University in Waltham, Mass., then expanded it to the University of Massachusetts Boston, then to the Boston region, and now, to colleges all over the country.
“If you’re kind of fearful and not trusting in your own abilities, it really puts you at a disadvantage when it comes to … moving forward … having that self con dence and showing it to people,” she added. “That’s kind of the whole ball game.”
CARYL ANNE FRANCIA
“We really have been able to impact a lot of young folks who don’t necessarily know where they’re going or don’t necessarily see their pathway or know that they like economics,” O’Mara said. “They aren’t really sure how they can apply what they’re learning in school to maybe potential career paths. So that mentorship piece is a core component of just trying to help students gure out, ‘How do I connect my education to potential career?’”
More than 300 students have gone through the program, which runs through the school year and consists of mentorship, internships and six in-person and virtual workshops. In her latest tracking, O’Mara found about a two-thirds conversion rate for students who had gone through the program and into investment management and nancial services careers. She added that Loomis Sayles has hired 15 students from the program, 13 of whom are still full-time staffers.
“This is really important work that we’re doing,” she said. “This whole program is about showing students this is an industry that exists. This is a place where you can leverage your strengths, that you can contribute, that you can be valued, that you are welcome to join.”
Business, community and thinking big in uenced Marcia Page as she grew up. She had role models in a mother who served as their small town’s rst woman mayor and a father who ran a pharmacy.
Although she thought she would become a pharmacist like her father, Page did become a business owner like him — specically, the Minneapolis-based founder of two investment rms.
Starting as a nancial analyst at Cargill, she said she worked her way to the “extraordinary” position to commit capital in her 20s at the agricultural rm’s global nancial trading desk.
She left for a small hedge fund in 1988, but kept in touch with former colleagues George Hicks and Greg McMillan. Their shared desire to create a business that invests across the liquidity spectrum led to the 1993 founding of Värde Partners, where she still serves as executive chair. As she transitioned to her current role
Venus Phillips
Managing director, Kresge Foundation
Wfrom being co-CIO and co-CEO at the $13 billion rm in 2016, she found time to think about the small amount of capital being managed by “underrepresented” groups and “how glacial the pace of growth has been for women in the industry.”
“There were very few of us then, and even fewer stayed in the industry over all of these decades and all of the changes,” Page said. “When I moved to the executive chair role, I looked up and wondered ‘Where did everybody go?’”
With $75 million of her own capital in 2021, she launched MPowered Capital, where she strives to accelerate growth for diverse managers as its CEO.
It’s still early days for MPowered, which closed its rst fund at $110 million in 2023. But with operational support from Värde and the partnership of managing director Chrissie Chen Pariso, Page has “very big aspirations for the future.”
“There’s not one person, one group or one organization that can do this alone,” Page added. “But if we are all on this ywheel and are playing at different points along it, we are moving it.”
CARYL ANNE FRANCIA
ith each stop Venus Phillips makes in her career, she adds a piece of experience to the mosaic that makes her the “well-rounded investor” she is as the managing director at the $4 billion Kresge Foundation, Detroit. With “all the skills that I learned throughout my career” and “the values that I’ve developed” — in terms of how one treats co-workers, and how an employer gives back to the community — these are all “things that just make me feel that I’ve arrived in this very ful lling place in my career,” Phillips said. After studying nance at Howard University, she started her career in wealth advisory at J.P. Morgan Private Bank, but a growing interest in the markets led her to join the investment strategy team. She “had a front-row seat to the early days of the Great Financial Crisis” before pursuing an MBA at The University of Chicago Booth School of Business.
Following graduation, she joined the university’s endowment and “cut her teeth” into manager diligence. She then used those skills as a portfolio manager at Morningstar’s investment management division.
A desire to be back with family in Michigan led her to similar roles at the U.S. and Canadian pension funds for Chrysler Group. But a “push to do something more mission oriented” brought Phillips to the Kresge’s private markets team, which manages close to $2 billion in assets. The foundation aims to improve opportunity and equality in U.S. cities. With so many issues — be it geopolitical con icts, climate change, social unrest and in ation — facing investors that need to be solved for, what excites the nicknamed “stormchaser” is the opportunity.
“What excites me, ironically, is the chaos that’s going on in the world, (and) knowing that we have the tools to help navigate it and help provide better returns” to uplift communities the foundation serves, Phillips said.
CARYL ANNE FRANCIA
Co-CEO and head of investments, Vontobel
“Go for it” is the piece of advice Christel Rendu de Lint, co-CEO at Vontobel, would give to other women. And it’s a mantra that Rendu de Lint has clearly lived by herself.
Having taken a cold call about a role at Vontobel — “really, I wasn’t looking at all,” she mused in an interview — she joined the rm as deputy head of investments in May 2021. She then had two major promotions: rst to head of investments in January 2023, responsible for $123 billion across multiple asset classes and managing more than 250 investment professionals; and then to co-CEO in January of this year.
While she didn’t dream of being an investor, her studies in economics set her on that path. “I like the constant challenge the industry brings, the
Karen Rode
Senior partner, global head of private equity and infrastructure, Aon
Karen Rode describes her career in nance as a winding road.
Krissy Pelletier
Partner, head of endowments and foundations, NEPC
From a young age, Krissy Pelletier has spent time volunteering with schools and nonpro t organizations. Her love for the work taught her to build strong relationships by listening to people’s stories and interests, and getting them “to pull that passion” into the job.
Today, she still works with nonpro ts as the Boston-based partner and head of endowments and foundations at NEPC. But working on the investing side was not on her radar as the daughter of a nurse and a father with sporadic employment.
“It was a great experience, but I knew after about a year that I wanted to get back into using my investment acumen,” Pelletier said. By way of a recruiter, she’d nd her place at the $1.7 trillion consulting rm, where she has been since 2008, working primarily with mission-aligned private and community foundations that seek to invest with impact and advance DEI.
After nding her way into the economics department at what is now Simmons University, she joined Wellington Management, where she started as an administrative assistant and worked her way up to become an equity research analyst. But, while still in her 20s, she realized portfolio management wasn’t for her.
Shifting to work in the nonpro t sector, Pelletier took on seemingly every role including writing grants and planning events.
Christel Rendu de Lint
market brings. I like the deep analysis part you have in investment management, and yet the necessity to connect with clients. It brings me joy,” she said. And while Rendu de Lint never had her own female mentor — although there have been in uential men who have helped to shape her career, including a professor at university who put her in up front of a class of 600 people to teach them, telling her to “go for it” — she’s found herself to be in a role model position without even realizing it. When she resigned from her role at Union Bancaire Privee as head of xed income to join Vontobel, she received emails from a number of women thanking her.
“It clicked in my mind that I can actually help other women. I’ve de nitely taken any opportunity that has presented itself where I could play a role … And if now it can help, I’m de nitely all-in to do it,” she said.
SOPHIE BAKER
Pelletier still volunteers her time to support younger people embarking on similar career paths. Aside from mentoring junior employees in NEPC’s allyship program, she participates in the DEI governing board and a number of employee resource groups — including the working parents group.
While her external work is limited until her daughter is “a little bit older,” Pelletier goes back to Simmons’ economics department for an annual event that supports graduating students and recent alumni.
“When I graduated, I didn’t even know what investment consulting was,” she added. “I didn’t really understand the investment industry beyond the mechanics of the classes I’ve been to. Going there and chatting about career paths, it’s really rewarding.”
CARYL ANNE FRANCIA
Rode knew she had a numbers-oriented mind — she double majored in accounting and nance and minored in economics — but it wasn’t until a few years into her career, after she decided she didn’t want to be an accountant and joined Heller Financial, that she learned about the private equity business.
In her current role at Aon, where she’s worked for 14 years, Rode coordinates and oversees all private equity and infrastructure research and consulting services. In doing so, she sets the direction and management of more than 50 clients and $40 billion in assets under advisement.
“It was a little bit of a winding road, a bit
of luck, and I really enjoyed it,” she said of where she landed. “So I count my blessings.”
Because of her experience, Rode wants women to learn earlier about the industry.
“A career in nance and asset management can be a very lucrative career, and there’s no reason why women shouldn’t be in the very lucrative careers alongside men,” she said.
“I think a lot of women just aren’t aware.”
To help change that, Rode, who’s based in Chicago, is on several committees with the nonpro t organization, Women’s
Association of Venture and Equity, or WAVE, and also has brought together diverse and emerging managers for Aon’s Wealth Insights series.
WAVE, Rode said, hosts a career forum every year to put undergraduate and graduate students, as well as early graduates, “in front of private equity and (show them) what the ecosystem looks like.”
“If you strike a chord or fancy with them while they’re still in college, they might start taking slightly different classes,” she said. By giving junior-level people “as many opportunities as possible to see as broad a perspective as possible early in their careers, it really helps people determine, ‘Whoa, I really like this or I don’t like this.’ Because when you develop a passion for something that you’re really interested in, that’s when you’re really good at it.”
Melody Rollins
Global head of core institutional clients, Bridgewater Associates
Melody Rollins advises anyone thinking about a career in nance to be “assertive and open-minded.” As global head of core institutional clients at $108 billion hedge fund manager Bridgewater Associates, those traits have helped her.
Rollins had no idea she would end up in nance. After a Sponsors for Educational Opportunity internship placement at Salomon Brothers, Rollins had an offer letter. But nancial hardship hit her family and she fell behind on college tuition. She called Salomon to say she couldn’t accept and then-CEO Deryck Maughan stepped in to say they would cover costs. “I owe him a lot,” Rollins said.
Her rst months on Wall Street were a culture shock. Rollins was living paycheck to paycheck, and it was the era when women still had to wear skirts to work. In fact, at one point, colleagues cut Rollins’ long skirt and told her to only wear ones
Dekia Scott
Vice president and chief investment of cer, Southern Co.
“It is extremely important to highlight African Americans in the investment community so that younger generations of talent see a broad and seasoned representation of investment professionals,” Dekia Soctt said in a statement on the CFA Institute’s internal news website.
Scott has led by example. Since joining Southern Co. in 2000, she has taken on greater responsibilities as CIO of the company pension plan but also as vice president of trust nance, overseeing roughly $14.8 billion in total assets. That latter title also includes responsibility for assets of charitable foundations within the parent company: Georgia Power Foundation, Southern Company Charitable Foundation and Southern Company Gas
Katrina Sherrerd
Partner and vice chair, Research Af liates
KShe joined Research Af liates in 2006 as a managing director and later served as CEO, president and COO of the quantitative asset manager that has over $147 billion in assets using strategies developed by the rm. Sherrerd said she’s faced adversity in a male-dominated eld but overcame it through perseverance, hard work and obtaining advanced degrees from top schools (a Master of Science from the Massachusetts Institute of Technology and a Ph.D. in nance from the Darden School of Business at the University of Virginia).
atrina F. Sherrerd, partner and vice chair of Research Af liates, has enjoyed a lengthy career in asset management that spans 45 years and required a lot of different hats.
IN INSTITUTIONAL INVESTING
above the knee. But Rollins persevered and established herself.
After heading back to school to pursue an MBA at MIT, she wanted to intern at PIMCO — a rm that didn’t have an MBA
Charitable Foundations. Scott’s in uence extends well beyond investing. She is a board member of the Community Foundation for Greater Atlanta, whose goals include providing cost-effective loans to nonpro t and for-pro t organizations that seek to improve housing, aid schools in underserved areas and improve incomes for lower-wage workers. She also is a director of the Council on Alcohol and Drugs, Atlanta, a substance abuse and prevention nonpro t agency organization.
internship. “I started to ask for what I want,” she said. “I was bold and not afraid to ask, ‘will you make an internship program?’” Rollins ended up working at PIMCO for over 15 years.
After a stint at a startup private credit rm, Rollins joined Bridgewater in 2018 as a fellow in client services and came to see it as a place where “you are your best idea. It’s a true meritocracy.”
Rollins, who co-founded Women of Color in Investments, has been asked if it was harder being a woman or being Black while starting in the industry. “Being a woman by far was the hardest thing back then,” she said. “I just don’t think men understood how to interact with women in this industry. It just was so new. That’s not the case anymore.”
Rollins spends a lot of time talking with young women about how rewarding a career in nance can be and how you can bring your personality to work. “I’ve developed trust in a way that’s authentic to me and to what my style is, and my truth is,” she said.
LYDIA TOMKIW
The Johnson Award, named for the organization’s co-founder, honors those who “make a difference for minorities and women professionals in the securities industry.”
Scott said Spelman College in Atlanta, where she graduated in 1993, helped her navigate her professional path.
In December 2020, she received the Joyce Johnson Award from the National Association of Securities Professionals, an organization that “assists Black and Brown professionals achieve inclusion in the nancial industry,” according to its website.
Scott did not respond to requests for an interview from P&I.
advanced my career by helping me be accepted in the eld early on, in addition to providing valuable skills and knowledge.”
Sherrerd said that when she was an undergraduate at the University of Virginia, she switched her major to business from history and she realized she liked and enjoyed this discipline.
“The eld of quantitative nance has traditionally been gender-biased, so getting an MS and Ph.D. helped to show that I had the necessary background to play in this space,” she said. “I believe the graduate degrees
“I was lucky to have mentors early in my career — and they were all men,” she said. “The bene ts I got from men willing to advise and go to bat for me is why I make an effort to mentor young people today, not just women, but also men, as well as minorities.”
Now that more women have entered asset management, she noted, younger women can see successful women in prominent positions — and that can serve as an inspiration to them, something she herself lacked early in her career.
Sherrerd is a passionate proponent of ESG investing and has authored articles on the subject. Although she feels “frustrated” by the growing attacks on ESG today, she said she is con dent that the “pendulum will swing the other way again.”
PALASH GHOSH
“It was during those four critical years that I was introduced to, embraced and cultivated the concept that I am as capable, as valuable, and as powerful as anyone I have ever encountered or will encounter in my future,” she wrote in a commentary published for the 20th reunion of her Class of 1993.
ROBERT STEYER
Tess Shih
Director, Capital Fund Management
TJill Schurtz
CIO and executive director, Minnesota State Board of Investment
Minnesota State Board of Investment CIO and Executive Director Jill Schurtz got an early taste of the roadblocks women can face when pursuing nontraditional roles.
As a second grader in Peoria, Ill., she remembers being enthralled when a local executive talked to the students about the nation’s military academies and highlighted the United States Military Academy at West Point. She recalls telling him that she wanted to go to the storied institution. And she remembers his response: He looked at her kindly but said that wasn’t an option for women.
“I thought that was unfair,” Schurtz said. But luckily for the U.S. armed forces, President Gerald Ford signed legislation in 1975 opening enrollment at male-only military academies to all eligible applicants — regardless of gender. Schurtz followed her earlier ambition, enrolling and graduating from West Point in 1986. She then spent seven years in the Army, rising to captain.
Before joining MSBI, Schurtz was CIO and executive director of the then-$1.2 billion St. Paul Teachers’ Retirement Fund Association.
Schurtz joined the $146 billion Minnesota state board in late 2022, succeeding CIO Mansco Perry III, whom she credits for his support during the transition.
In her short time at MSBI, she has developed an internship program, built the investment board to 46 employees, up from the mid-30s, and created executive and senior leadership teams, among other actions. She also implemented a DEI working group, made up of public, private-sector and nonpro t professionals to tap for guidance.
Ensuring the board hires the best candidate for each role is critical, Schurtz said, noting that taking a hard look at how job postings are worded is vital to building a diverse and quali ed pool of applicants.
“When you have something so important as serving your country, to not say that that’s a duty and obligation and a privilege for everyone, to me, seems wholly mistaken,” she said. “So thinking of the world through that lens, what do you want that (applicant) pool to look like? How wide do you want that opportunity to be? And quite frankly, why wouldn’t you make it wide?”
JULIE TATGE
ess Shih was urged to work hard and shoot for the stars by her father — who was on the original team of engineers for NASA’s Mars Path nder — and by her mother who had a mission of her own: nding educational resources for her children, leading her to rely on libraries and public television.
Shih, a director and region head at Capital Fund Management, a $15 billion quantitative and systematic asset manager, said her parents immigrated to the U.S. from Taiwan seeking greater opportunity.
“My dad is a NASA rocket scientist and my mom — you know, and I say this lovingly — is your typical tiger mom,” she said, adding that whether it was in school or her professional life, “I really have to probably hand it to my parents for instilling that drive for success.”
Co. in 2017. As a region head, she is responsible for the Midwest, South and Latin America as well as a few Northeastern states. She works with pension funds, endowments, foundations and other clients to identify CFM solutions that t their needs. While her parents fostered Shih’s drive to succeed, they had little familiarity with Wall Street, she said.
“I was very fortunate to have come upon this diversity program called Sponsors for Educational Opportunity my junior year of college,” Shih said. “And that’s actually what brought me to Wall Street.” In addition to supporting diversity programs including SEO, Shih serves as a commissioner for a county library and is on the community advisory board for a local Public Broadcasting Service station.
A Harvard Business School graduate, Shih joined CFM from JPMorgan Chase &
“Libraries and PBS are two wonderful things that I look back on as being very instrumental to me in terms of growing up,” she said, noting her late mother’s reliance on those resources. “So, I love the opportunity to give back.”
KATHIE O’DONNELL
Maria Stamolis
Chief investment of cer, head of investment management, Lincoln Property Co.
Maria Stamolis, CIO and head of investment management at Lincoln Property Co., which has about $20 billion in assets under management, says she is not afraid to pivot.
“I was building a career from scratch and didn’t have much to lose,” said Stamolis, who grew up in Brooklyn and was the rst person in her family to go to college. Stamolis planned to go to law school but pivoted to real estate.
“In New York, you can’t help being interested in buildings,” she said.
At age 29, Stamolis moved to Los Angeles to help liquidate the portfolio of bankrupt Mutual Bene t Life Insurance Co. where, as part of a small team, she could be creative and in uence outcomes, she said. When that job ended, she moved to GE Capital, which was a more structured environment, she said.
There was no such thing as mentorship or sponsorship 25 years ago, and so, she said, “I made it my life’s work to have senior executives take an interest in me.”
Her father, who was her rst and best mentor, taught her she could do anything, Stamolis said.
She left GE to work for its largest West Coast client but hit a crossroads when she wanted to have children.
Work-from-home and today’s extended leave options didn’t exist, so she took a personal sabbatical.
“I truly believed if it was supposed to work out that I got back into the industry, that I would be successful,” Stamolis said.
After about six years, Stamolis took a job at Canyon Johnson Urban Funds, an urban real estate investment business of Earvin "Magic" Johnson and K. Robert Turner.
Chavon Sutton
Senior investment director, sustainable and impact investing research, Cambridge Associates
Growing up, Chavon Sutton said she “wanted to be 18 different things.” A doctor. A singer. She played varsity lacrosse and eld hockey. She ran track. She studied journalism. She’s a classically trained soprano.
So how did she end up as a senior investment director at Cambridge Associates with a more than two-decade career in nance?
“I like to tell people that my career hasn't been a straight line, but the right thread,” Sutton said. “And I didn't grow up thinking that I was going to be in nance. I didn't have people close to me or in my family who were investment bankers or anything of the sort. But I was keenly aware of money moving things and making a differ-
Allyson Tucker
CEO, Washington State Investment Board
Allyson Tucker is continuing the efforts of her predecessor in fostering an open and diverse culture at her workplace and gets to work in her hometown near her family to boot.
Tucker, born and raised in Olympia, is CEO of the Washington State Investment Board, which oversees $202.8 billion in state assets. She joined WSIB in 2009 and rose up the ranks to chief investment of cer in 2019 and nally CEO in 2022, succeeding the retiring Theresa Whitmarsh.
One of Tucker’s rst moves as CEO
At Canyon, she was co-head of real estate and head of asset management. After 16 “amazing” years building a business, she decided it was time to go to the next level and last year joined Lincoln.
Stamolis also keeps busy teaching a yearlong real estate investment course at Southern Methodist University’s Robert and Margaret Folsom Institute for Real Estate in Dallas. She said she will meet with any student who asks but, “I tell them my feedback will be very honest.”
ARLEEN JACOBIUS
ence in people's lives and in communities. And so I grew to want to understand how money was made, how it was kept and how wealth was transferred from generation to generation.”
While an undergraduate at the University of Pennsylvania, Sutton said her college adviser “told me that I can still help people without being pre-med,” and so she studied economics. After starting her career as a credit analyst, Sutton gravitated toward investment management because she saw how she could apply her knowledge of how markets work toward helping people.
In addition to getting her MBA at New York University, Sutton also studied journalism there and wrote
in 2022 was to pick up where Whitmarsh left off to promote diversity, and that led to the creation of the DEI Blueprint, the rst major effort by the organization to formally adopt strategies to increase its effectiveness and pool of talent.
While she emphasized she is not an expert on DEI, she said her role as the initiative’s executive sponsor is important to her in furthering what she says is a very special culture at WSIB.
“I have an advantage there because I went through this process of being
about nance for such outlets as Forbes and Reuters because she said she wanted written and verbal communication “to be my superpower.”
Tracy Stuart
CEO and managing partner, Corbin Capital Partners
Tracy Stuart has never shied away from trying new things in her career and building businesses.
As a student, Stuart knew she wanted to travel. She was the rst analyst sent abroad by Wilshire Associates to Europe to evaluate equity managers.
“Working at an investment consultant is such a great way to learn the industry and to start your career,” she said.
“It taught me to understand the needs of the client, to advocate for clients … I’ve carried this on. Clients are at the center of this universe.”
transform into Corbin Capital Partners, growing it from a few hundred million into an over $9 billion rm. As CEO, Stuart has evolved Corbin into an alternatives manager focused on hedge funds and opportunistic credit investing, including spearheading a sustainability practice, and said her job is focused on “how we’re going to keep evolving.”
Stuart thinks hedge funds and private equity are still some of the “worst parts of the industry in terms of diversity.” But what has changed since she started her career is “people are now conscious that they should be doing something” and the industry’s largest rms are working on it.
Stuart focused on clients working with John Casey building the business that would become Casey Quirk and later at Goldman Sachs where she built an open-architecture investment program.
In 2004, “hedge funds were new” and Stuart joined the predecessor hedge fund-offunds business that she’d
Sophia Tsai
Corbin has tried to lead by example with women or minorities representing 61% of the investment team and 54% of its partners.
Stuart advises young people in the industry to nurture an open mindset, solicit direct, honest feedback and to “prioritize, know what’s important, and learn to say ‘no.’”
LYDIA TOMKIW
Managing director, Trinity Church Wall Street
W“I really wanted to be known as a person who can take really complex ideas and explain them in plain English,” she said. “And what I found is that through my career, having that skill set and being very straightforward and speaking plain English really builds trust with people and builds trust with clients and has been really additive to my career.”
Cambridge Associates had $582 billion in assets under advisement and $78 billion in assets under management as of March 31.
ERIN CHAN DING
female in a male-dominated industry and understanding that we need to do our best to make sure we’re getting people comfortable enough that they can excel in their roles,” Tucker said.
“That blueprint allows the organization to know that we’re on a journey and that it’s safe to come to work here,” she said. “We offer coaching, we offer feedback, we offer education, we offer a library and we offer open discussions about these topics.”
ROB KOZLOWSKI
hen she immigrated to the U.S. from Hong Kong in 2005, Sophia Tsai viewed herself as an “underdog.” She earned a degree from The Chinese University of Hong Kong, as opposed to one from a U.S. college at the time, but said she is grateful to have been given the means to learn and grow on her journey to become the managing director for Trinity Church Wall Street’s $6 billion endowment.
After working in general management at British conglomerate Swire Paci c, Tsai started as a business analyst at a GE Capital-acquired restricted license bank in 1995. But “there was immediately a crisis happening,” she said. Since a noncompete clause was not negotiated in the deal contract, half of the commercial bank’s staff “walked across the street and set up their own shop” when the acquisition closed.
“You learn the most when you’re either in a startup doing everything, or in a mess and chaos doing everything,” she added.
Tsai moved into roles within GE’s business development, private equity and asset management divisions before making the switch to a nonpro t setting at Trinity in 2017. Through her time at GE, she worked through many crises and “learned throughout my career to make sure I look around the corner before a crisis happens — and be positioned so that when a crisis happens, I can be in a position to take advantage of those dislocations.”
At the same time, Tsai has also developed a “superpower” that allows her “to recognize other underdogs who are very hungry, just always strive for success and have to be differentiated in order to survive.”
To that end, she’s proud to have built a private equity portfolio at Trinity with diverse managers. Following George Floyd’s death in 2020, she and two colleagues founded Institutional Allocators for Diversity, Equity, & Inclusion, a consortium that maintains a database with over 1,300 diverse managers.
ANNE FRANCIA
CARYL
Raquel Vargas Palmer
Managing partner, KPS Capital Partners
Shortly after Raquel Vargas Palmer graduated from Stanford University in 1994, she moved to New York City and took a job at Kidder Peabody, a Wall Street investment bank. Three months later, the bank was sold and she and many of her fellow new hires were laid off. At the time, the news was upsetting, but now, Palmer, managing partner at private equity rm KPS Capital Partners, has a different perspective.
“Being laid off on Wall Street three months in turned out to be the best thing that ever happened to me,” she said. The reason? It led her to interview with Michael Psaros and David Shapiro, KPS’ co-founders, and the three of them — now the rm’s three managing partners — have been working closely ever since.
Sue Walton
TIN INSTITUTIONAL INVESTING
These days, Palmer co-leads KPS’ dealmaking activity, serves as chair of the rm’s investment committee and is a member of its management committee.
During her leadership, KPS’ AUM has grown to $21.6 billion, and last year the rm closed two funds with an aggregate of $9.7 billion in capital commitments.
Palmer also serves as chair of the board of directors for The Opportunity Network, an organization that supports more than 10,000 underrepresented students in their journeys through college and beyond with paid internships and a variety of networking opportunities.
As the rst person in her family to attend college, Palmer said The Opportunity Network’s mission is near and dear to her, but the mission even goes beyond higher learning.
“The ultimate goal is not to get kids into college, the goal is to help them nd happiness through a ful lling career,” she said. “It takes a lot of my time, but I'm happy to give it because it's pretty rewarding.”
BRIAN CROCE
Senior retirement strategist, senior vice president, Capital Group
o achieve an important goal, Sue Walton became a magician, enrolling in a 12-week training course to practice and understand the ne art of sleight of hand.
The training wasn’t linked to her job as a senior retirement strategist at The Capital Group Cos. nor was it to make extra money on the side.
Her training enabled her to become a volunteer for Open Heart Magic, an organization whose volunteers travel to children’s hospitals to teach young patients magic tricks, providing fun and entertainment and using magic as therapy. “Hi. I’m Sue. Would you like to do some magic tricks with me?” is the volunteer’s opening line.
Open Heart Magic was founded in 2003 by Sue’s husband, Mike Walton, whom she met in the Peace Corps. Although her Capital Group travel schedule has thwarted her volunteering, she remains a board member and fundraiser.
For her career, “I was indoctrinated at an early age” about investing by her father who invested for her college fund and who counseled her to study economics.
Serving in the Peace Corps in Estonia between 1994 and 1996, she worked in economic enterprise development.
Walton joined Capital Group in 2015 having been, among other jobs, a de ned contribution plan consultant for what is now Willis Towers Watson. Capital Group had $2.53 trillion in assets under management at the end of 2023.
Walton said she has bene ted from female mentors at almost every job she has held, including some early advice by one who counseled her: “If you have a specialty, hone that craft and be an expert. Being an expert provides a natural seat at the table.”
Jane White
CEO, co-founder and president, Granahan Investment Management
Major asset managers like Wellington Management and Fidelity Investments currently have female CEOs, but that would have been “unheard of” four decades ago, when Jane White began her career. White, co-founder, president and CEO, and a senior managing director of the $2.6 billion Granahan Investment Management, said that while women have made some progress over that span of time, she cautions that even now “only 10%-15% of attendees at meetings I go to are female.”
To push progress further would require more men to “get on board with women in the workplace” at a high level, meaning some of the men who still dominate the eld must change their dated attitudes, she said.
Partner, StepStone Group
NNatalie Walker
atalie Walker, a StepStone Group partner, said she was in the right place at the right time when she embarked on a career in private equity.
Graduating from Georgetown University with a degree in international business and marketing, Walker landed a job in New York working for Tom Robinson, then head of alternatives at Oppenheimer Investment Management, who had come out of retirement to relaunch the rm’s private equity team and raise a fund-of-funds. As the most junior and sole female member on a small, new and growing investment team, Walker said she still had big opportunities, investing in private equity funds, co-investments and secondaries.
promoted diversity, she said, noting that one of the consulting and management rm’s co-founders is Jose Fernandez, partner and co-chief operating of cer.
Walker said that she felt supported and bene ted from having male allies who believed in her and helped her get to the next level, including being promoted to partner. She focuses on U.S. small managers and secondaries.
Walker landed a job at StepStone in 2010 by sending a cold email to its then-CEO Monte Brem.
StepStone had a “great culture” and
That’s what led Walton to the de ned contribution arena, which, at the time, was a lot smaller than it is now.
Walton has become a mentor, promoting and participating in Candid Capital, a forum for employees to discuss work issues with other workers and leaders. “We want to make sure individual voices are being heard,” she said. “We want to create a community of support.”
ROBERT STEYER
White gives a lot of credit to one of the most important mentors of her life, Jack Granahan, founder of Granahan Investment, who died last December and was a “major force” in her career.
“I left my former employer because they told me I could not become an analyst because I was female,” she said. “I interviewed with Jack and he told me if I worked hard he would help me achieve that goal — and he did. I worked really hard. He expected and valued that.”
And, as she was often the “only woman in the room,” White said she had to be better prepared than the men for any meeting or conference, and this often involved waking up at the crack of dawn and reading everything possible about any investment
“I think I’ve always made my goals clear to my superiors,” she said.
Now in a more senior role at the rm, which has $678 billion of assets under management and advisement, Walker said she endeavors to pay it forward, helping the next generation of women gain con dence in their ability to get to the next level and apply for promotions. She said that some women won’t seek the next career step if they don’t check every single box.
“I’ve found that having more diverse teams has led to more robust discussions,” she said.
ARLEEN JACOBIUS
Whitney Watson
Global co-head and co-chief investment of cer of xed income, Goldman Sachs Asset Management
Being a 6-year-old on a balance beam in front of judges builds skills that come in handy when you’re co-head of a Goldman Sachs Asset Management division that manages $1.6 trillion in assets.
“Nerves take on a different meaning throughout the course of your life,” said Whitney Watson, co-head and co-CIO of xed income and liquidity solutions at Goldman Sachs Asset Management. “There’s just a level of toughness that comes from being an athlete, any type of athlete, it doesn’t have to be a college athlete.”
But Watson was indeed a college athlete, having been on the gymnastics team at the Massachusetts Institute of Technology, a university from which she received both a bachelor’s degree and a master’s degree in 2005.
topic.
Perhaps the biggest message for women who want to rise in the industry, White said, is to have the “courage of their convictions.” And that is how women will ascend to the top today, she suggested.
White also noted that a program she helped start, the Wall Street Diversity Accelerator, recently celebrated its fth graduation. The program helps minority college students gain real investment experience and earn internships at top asset management rms and banks.
“Our rst year, we had ve rms which hired seven interns,” she said. Since that time, WSDA has hired 118 interns from 63 participating colleges across the country.
She also knows how to pivot. Watson, who has spent her entire career at Goldman Sachs, was trading mortgages in 2008 when a mentor of hers who had run the mortgage department for years was tapped during the nancial crisis to become the chief risk of cer of the entire asset management group. He reached out to Watson and asked her to join him.
“And so then, without much planning, my career shifted into asset management,” she said. While the decision was ultimately a good one, she had doubts at rst.
“I went from eight computer screens to a cubicle in the corner, so I wasn’t really sure about my decision that I had made,” Watson said. “But it ultimately worked out.”
Watson said she enjoys working with clients to deliver long-term investment returns and thinking about customized solutions for clients.
“My mom is a retired teacher, so the concept of managing a public pension, it’s … very near and dear to my heart,” she said.
KATHIE O’DONNELL
Amanda Wilson
Managing director and head of distribution for the U.S. and Canada and consultant relations, Principal Asset Management
Amanda Wilson, managing director and head of distribution for the U.S. and Canada institutional and consultant relations at Principal Asset Management, has seen an increase in the number of women entering asset management over her 20-plus years in the industry. But she said “signi cant gaps” still exist at the senior level and in areas like sales and investment leadership.
rm’s North American institutional business after spending 15 years at J.P. Morgan Asset Management’s institutional business.
Wilson said she has faced some unconscious bias as a woman in the industry.
“We should each play a role in demanding more diversity in our candidate slates, hiring and promotion practices, industry events, and stages,” she said. “As our institutional client base continues to diversify, it is just as important for advisers and asset managers to have talent that is equally representative.” It is also crucial to “create a culture that systematically, personally, and intentionally promotes diversity,” Wilson observed.
Wilson joined Principal in August 2018 and overhauled the
Kelly Young
CEO, Acadian Asset Management
On the road to becoming CEO of Acadian Asset Management, Kelly Young found that with age, “the con dence, the certainty and the clarity become greater,” she said. Born into a family that worked in the trades in the U.K., Young’s fascination with nance began at a young age watching news coverage of the 1987 stock market crash. After studying economics and nance at Brunel University London, she landed her rst job in investment banking, but had the realization at age 22 that the industry “wasn’t the right t for me.”
“To decide fairly early on that it wasn’t for me did require a bit of soul searching because it’s like, ‘Well, if it’s not this, what’s next?’There wasn’t really a backup plan,” Young said. But the challenging decision to change industries “turned out to be a great transition” as she started in asset management as a portfolio manager at Barclays Global Investors.
“To overcome these challenges, I have leaned on both my technical skills, such as pursuing my CFA certi cation early in my career, and interpersonal skills in sales and consensus building,” she said. “Additionally, I have leaned on my network of mentors and advocates, who have provided valuable guidance and support to help me overcome challenges and aid in my success.”
In addition, having role models, mentors and advocates is key to advancing one’s career.
“Role models are important because they allow you to see yourself in roles and places that historically haven’t ‘looked’ like you,” she explained. “Mentors provide advice, help you understand issues, relate to your experiences and brainstorm solutions. Advocates are crucial for pushing the needle forward, especially when you aren’t in the room.”
PALASH GHOSH
While she enjoyed taking portfolio management roles, Young realized her strengths were in building relationships with clients. Finding it easier to make a pivot at age 30, she took her rst role at Acadian as a relationship manager, becoming the rm’s third employee in the London of ce.
By the time she was tapped to lead the rm in December 2023, Young “didn’t have to think more than two seconds,” she said. Today, she works from the $112 billion rm’s Boston headquarters and takes pride seeing the number of London-based staffers has grown to 25.
She enjoys making an impact — whether its through engaging with charities like Women’s Money Matters or Challenge Africa, or through strong returns for retirement fund bene ciaries — for which “if you do things well, you’re going to ultimately improve people’s lives,” she said.
“That’s something that still gets me up every morning, as much as it did 20 years ago,” Young added.
IN INSTITUTIONAL INVESTING
Honorees
CONTINUED FROM PAGE 1
culture that you want,” she noted. “It starts with role modeling the behavior of ‘how would someone want to be treated?’ and ‘how would I want to be treated by someone?’” Young added. At the $112 billion manager, “that’s the behavior I try and inuence the team to show. It’s collaboration. It’s teamwork. It’s mutual respect and support.”
While being their own champion was part of the equation for each honoree’s success, they acknowledged how hard it was — especially as a woman.
“It’s easier for a man to brag and not be dinged for it,” but as a woman, “if you stand up too much,” then there’s “a negative reaction to that,” said Anne-Marie Fink. She serves as chief investment of cer for private markets and funds alpha at the $156 billion State of Wisconsin Investment Board, Madison.
Fink added that women walk “a very narrow path between not standing up for yourself at all” — and if they don’t, they can get “sidelined.”
But they put themselves in danger if they don’t stand up for themselves in opportunistic moments, said Venus Phillips, managing director at the $4 billion Kresge Foundation.
“If you’re doing that, and the next person to you is talking about their accomplishments and advocating for themselves, they’re always going to appear to be more accomplished and more capable than you are,” she noted. “We have to learn to nd comfort in that discomfort and speak up.”
While “not great at tooting my own horn,” Phillips said there’s “power in embracing your accomplishments (and) lifting them up — especially when you’re applying for a job or requesting a promotion.”
Highlighting achievements
Through her career, Young has observed that women are less inclined to openly share their achievements, so “you have to push people to brag a little bit,” she said. Leaders like herself also have to help shine a light. She thinks about it “as an opportunity to highlight people’s talents — like the quiet, hardworking folks who have huge upside potential” — to a broader group of people.
“The advocacy piece can be really important to highlight to other people the great work that some of our female colleagues might be doing because they don’t feel that they have the voice to do that themselves — or they feel inhibited to do that themselves,” Young added.
For Ann Miletti, she couldn’t say that she has ever taken a moment to celebrate moving up in her career since she “was always so anxious about surviving in that area.”
She serves as Allspring Global Investments’ chief diversity of cer and head of active equity, but her journey in the institutional investing space began at the call center in 1991, when the $504.9 billion rm was Strong Capital Management.
As the rm evolved through its purchase and sale by Wells Fargo, so has Miletti, who would take on roles as an analyst and portfolio manager.
But the growth came with an overwhelming feeling, in which she almost told a manager of hers, “I’m not quali ed to do this.”
“I think I’ve just lived in fear, and in some cases, of disappointing people (or) failing on the eld,” Miletti said. But “the one thing I always knew about myself is I could work hard, so if I was willing to put in the work, I could probably gure it out.”
An organization’s culture can play a big role in how a person feels about their work. After joining Kresge in 2019, Phillips started to allow herself to be celebrated because “I was in an organization that celebrated me,” she said.
“There is something to be said about being in the spaces where you are celebrated in the best way that pours into you, and then it makes you feel better about advocating for yourself,” Phillips added. “It makes you realize that you can be more condent without being cocky.”
While Phillips does not “think that’s as common as it should be,” having a culture that celebrates its employees’ works “lets you really
‘The whole idea of “just work hard and keep your head down, and people will magically reward you for that,” is not necessarily the case. But you’ve got to speak up , and in doing that, amazing doors could open for you.’
KRESGE FOUNDATION’S VENUS PHILLIPS
show up as your full authentic self and really embrace all the great things that you’ve done along the way,” she noted.
Tracking progress
Progress can be tracked in multiple ways, from resumes to a daily checklist. For instance, checking off tasks and goals of a checklist and reviewing that list can leave a “encouragement that I am moving forward,” as it does for Joy Booker, managing director and head of institutional client relationships, Americas, at PineBridge Investments.
As she carries on with her work at the $169.7 billion manager, Booker keeps “notes on everything,” adding that she nds it “very satisfying to look at all the collective progress” she has made over time.
For those seeking a primer to self-con dence, “we can point to many examples of being underestimated, undervalued and overlooked for opportunities as reasons why we must beat our own drum of capability and excellence,” Booker added. But then, it’s a matter of getting others, including managers, to acknowledge one’s worth, too.
Even if one has an MBA from a top business school in addition to industry certi cations, “none of that really matters if you don’t know how to ad-
vocate for yourself,” Kresge’s Phillips said. She has asked for several promotions throughout her career, adding that “I got better at making my cases each time.”
Women working in nancial services are “substantially less likely” than their male counterparts to receive an unsolicited promotion, according to a study published by the CFA Institute. The study — which was based on a 2019 survey of Australian nancial services workers — also concluded that women receive more promotions when they request them.
In her path to Kresge, Phillips asked a previous employer to be promoted to a vacant role, but was told she “hadn’t been at that organization long enough to qualify for a promotion,” she said.
As the employer sought to look outside to ll this role, she re ected and asked about the desired qualications — especially since this hire would come in with zero years at this organization as opposed to Phillips’ two years.
“They’re like, ‘10 years of investment experience, a CFA, probably an MBA — and you don’t have that,’” Phillips said. “It was great that I asked the question because I actually did have those quali cations. They just forgot.”
That is the “sad reality” with many managers, Phillips noted. “We look at these resumes, we talk to people during the recruiting process (and) we get excited about these individuals. Then once they get in the seat, we forget about what it was that excited us in the rst place,” she added.
“The whole idea of ‘just work hard and keep your head down, and people will magically reward you for that,’ is not necessarily the case,” Phillips said. “But you’ve got to speak up, and in doing that, amazing doors could open for you.”
Confidence is essential
PineBridge’s Booker said a piece of advice she’d give her younger self is “to be more con dent and bold.”
“But I know that’s not how it works,” she added. “Sometimes, you can’t just tell yourself to be more condent.”
“Despite knowing your stuff, raising your hand — and sometimes voice — for professional opportunity” can be hard for early career women, Booker said. To become one’s “best, con dent and bold self,” she advised “surrounding yourself with people who are positive, encouraging and supportive of your goals — (and) people you trust (who) will be equally kind and honest in providing constructive feedback.”
These people include mentors, partners and sponsors who advocate from within an organization — and those who provide a sounding board through outside platforms such as professional development organizations. Booker said she has developed a group of mentors and advisers over the years, serving as her “war cabinet” as she “navigated through professional and personal de ning moments and complex situations.”
“In doing so, you are only one step, phone call or email away from the support you need,” she added.
Similarly, in running the chief diversity of ce at Allspring, Miletti
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GER JAARSMA Chairman PENSIOENFEDERATIE (FEDERATION OF THE DUTCH PENSION FUNDS)
THOMAS CURRAN Professor of Psychology, Author of the Perfection Trap LONDON SCHOOL OF ECONOMICS
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Stian Kirkeberg Head of Machine Learning and AI Norges Bank Investment Management
PEDRO ANTONIO GUAZO ALONSO Representative of the Secretary-General for the investment of the UNJSPF assets UNJSPF
SANYA GOFFE Attorney and Eisenhower Fellow PRESIDENT OF THE PENSION INDUSTRY ASSOCIATION OF JAMAICA (PIAJ)
LAURA CHAPPELL CEO BRUNEL PENSION PARTNERSHIP
AEISHA MASTAGNI Portfolio Manager CALSTRS
CHRISTOPH JUNGE Head of Alternatives VELLIV
TH E LARGEST RETIREMENT FUNDS
Buoyant markets pump up largest retirement plan assets to $22.6T
Assets of the world’s top 300 retirement plans increased by 10% in 2023 to a total $22.64 trillion, staging a recovery from their 12.9% decline in 2022, according to the according to the latest annual survey by Pensions & Investments and Willis Towers Watson PLC’s Thinking Ahead Institute.
The plans bene ted from the recovery of markets, which have picked up momentum and generally did better in 2023, said Jessica Gao, London-based director at the Thinking Ahead Institute. “But we still have interest-rate pressure so funds are working hard to look for that extra return,” she said. The survey covers asset owners including public and corporate pension funds, de ned contribution plans and state-owned pension funds and features data up until Dec. 31.
The top 20 retirement funds outperformed the top 300 plans, with growth at 11.6%. The 20 largest plans also grew as a percentage of total assets, to 42.1%, compared with 2022’s 41.5%. European plans in the top 20 ranking performed best among the regions, with assets increasing by 18.6% in 2023 to account for 25.2% of the top 20 funds, while Asia-Paci c funds grew 10% and U.S. funds grew 8.3%.
The share of U.S. funds in the top 20 fell to 25.4% from 26.1% the year prior and the share of Asia-Paci c funds in the top 20 fell to 42.5% from 43.1%.
The MSCI All Country World index saw 22.8% returns in 2023 as both emerging and developed markets had positive returns of 10.3% and 24.4%, respectively.
But while market performance contributed positively to retirement plans’ asset growth in 2023, executives remain concerned for the outlook. More than half of the top 20 plans in their annual reports voiced concern over high in ation in the global economy, geopolitical tensions and the resulting rise in interest rates and global uncertainty.
“Volatility of the nancial landscape remains. The impact of high in ation and high interest rates create both uncertainty and opportunities for the fund. Nevertheless, it’s essential to remember that as a long-term investor we prepare for these market uctuations over the course of several decades,” California Public Employees’ Retirement System, Sacramento, was quoted as saying in the report. CalPERS had $452.5 billion in assets as of Dec. 31.
Around half of the top funds also reaf rmed their commitment to sustainable and responsible investment by implementing best practices in corporate governance.
“Climate risk management is a priority for responsible investment, and in 2023 Norges Bank published sharpened expectations for how companies should manage climate risk and views on the use of voluntary carbon credits. A number of companies in the portfolio committed to net-zero carbon emissions during the year,” Norway’s Government Pension Fund Global, Oslo, was quoted as saying.
Top 20 movements
The top spot in the ranking remained the Government Pension Investment Fund of Japan, Tokyo, which had $1.59 trillion in assets
as of Dec. 31, followed by Norway’s GPFG with $1.58 trillion.
However, GPIF fell out of the top spot briefly in July when the yen sank to a 38-year low against the dollar. The yen has since recovered to around ¥148 per dollar as of Aug. 19, compared with the ¥160 range in July.
Considering how close in numbers the Japanese and Norwegian funds are, and the growing strength of the U.S. dollar, the number one
spot could be contested in the future, Gao said.
The top 20 rankings also had a new entrant, as Taiwan’s Labor Pension Fund, Taipei, reached $176.3 billion in assets as of Dec. 31, edging out India’s Employees’ Provident Fund, New Delhi, with an estimated $176.2 billion in assets.
The Labor Pension Fund posted record gains driven by local market returns that ben-
The P&I/Thinking Ahead Institute World 300 by the numbers
The P&I/Thinking Ahead Institute World 300: Largest retirement funds
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The P&I/Thinking Ahead Institute World 300: Largest retirement funds
DEFINED CONTRIBUTION WEST
Harnessing AI for Enhanced Participant Engagement
Reaching and engaging participants with crucial plan changes and updates have become increasingly challenging. As a plan sponsor, it’s essential to explore deeper into your communications toolkit to uncover strategies that resonate with participants at various stages of their savings journey—and motivate them to take action!
At P&I’s DC West, we’ll dive into some of the most e ective, go-to strategies that truly work. Sometimes, the simplest and most direct methods can make a significant impact, especially when participants grasp the power of saving just 1% more.
Join us for a wide-ranging discussion that will cover these key strategies and more!
AI’s Impact
Use of AI tools to engage & enhance communication
MODERATOR:
Jason Parese Senior Director, Retirement Services Education ADP Retirement Services
Social Media
Use of LinkedIn, X, & other social media platforms
Bill Bercek Manager, US Retirement and Investments Amazon
Text messaging Does it work & how often before they opt out?
Donald Fogg Senior Manager, Retirement Plans Administration The E. W. Scripps Company
Snail mail Is old still gold? Uncommon communication methods cut through digital noise
Digital & In-person
Using video & classroom style sessions to educate
Diane Iwata Manager of Health and Retirement Benefits San Francisco Bay Area Rapid Transit District
Trisha McGinty Head of Cybersecurity Communications Empower
Marita M. Yancey Senior Director of Benefits and Wellness The University of Texas at Dallas
The P&I/Thinking Ahead Institute World 300: Largest retirement funds
Megafunds
e ted from the arti cial intelligence boom, Gao noted. The fund gained NT$478.5 billion ($14.9 billion) from a 12.6% return on investment in 2023, according to data released by Taiwan’s Bureau of Labor Funds.
Asset allocation mix
The plans did not make signi cant changes to their asset allocation across regions, although Gao noted that the large pension funds continue to look to invest more in the alternative space.
European and Asian plans had a stronger preference for bonds, while North American funds preferred equities, the study found. For instance, the weighted average allocation to bonds among top 300 European funds was 47.3%, 39.2% to equities and 13.5% to alternatives and cash.
ing investment decisions based principally on risk factors rather than asset classes.
A previous Global Asset Owner Peer Study by the Thinking Ahead Institute found that the 10-year annualized real net return of total-portfolio-approach adopters produced 1.8% higher performance per annum, Gao said.
DB to DC
DB funds continued to dominate the share of assets in Europe, North America and Asia-Paci c, albeit to a diminishing extent. DB fund assets made up 60.8% of the total assets of the top 300 funds, down from 62.2% in 2022 and 63.5% in 2021. DB fund assets rose by 6.8% in 2023 from the year before.
“Europe traditionally is a large (de ned bene t)based area, and a lot of the de ned bene t funds have asset-liability matching. So traditionally they would invest in bonds,” Gao said.
Similarly, Asia-Paci c funds also had a preference for bonds. Asset allocation to bonds was 48.7%, 40% to equities and 11.3% to alternatives and cash, the study found.
North American funds, however, had a majority of their portfolio allocated to equities at 48.3%, followed by 29.3% to alternatives and cash, and 22.4% to bonds. Even though plans did not make significant changes to their asset allocation, Gao said that they are adjusting their approach to asset allocation, moving to a total portfolio approach from strategic asset allocation to increase fund resilience and improve overall risk management.
Total portfolio approach refers to a more dynamic method of asset allocation that measures performance against fund goals as opposed to benchmarks and mak-
De ned contribution plan assets rose 15.3% to account for 26.4% of top 300 assets in 2023, up from 25% a year ago. Reserve fund assets also increased 10% in 2023 to make up 11.9% of total fund assets compared with 11.8% in 2022. The remainder was in hybrid plans.
“There’s an obvious trend of DB going down and DC going up, and we’re especially going to see that in the next year with the Netherlands pension reform,” Gao said.
“The Netherlands traditionally have the majority of (pension funds) classi ed as DB but now because of the pension reform, the Netherlands are switching to a DC format. So that is something that will (lead to) a big swing on the DB-DC split,” she said.
The new pension rules came into effect in July, mandating that all future pension payments must follow a DC plan, and that providers must complete the transition by January 2028.
In Europe, 45.8% of funds are DB, 12.8% are DC, 36.9% are reserve funds and 4.6% are a hybrid. In Asia-Paci c, 62.5% are DB, 29.1% are DC, and 8.4% are reserve funds.
CALENDAR 2024
Honorees
couldn’t do the work on her own. She couldn’t do it without the help of Deputy Chief Diversity Of cer Sonya Rorie. Together, and working with employees, they make sure diversity is embedded “across the culture” of the rm, and that everyone takes ownership of it, Miletti added. And she needed encouragement from someone else to get started. As the rm was starting anew, CEO Joseph Sullivan asked Miletti about adding on the chief diversity of cer role in 2022. She was hesitant since, for most of her career, “I didn’t feel like I had the list of quali cations to feel con dent to say ‘yes’ right away,” she said.
But wanting the rm to “have a different lens” when it comes to DEI, Sullivan would tell her that “your own career path is meaningful,” given how she’s evolved in her own career and how she’s led the equity teams, Miletti said.
He told her that “you can show people that you can get into this industry and make it without taking the standard path,” and that he want-
Scammers
Steve Cohen of Point72 Asset Management.
A spokesman for AQR told Pensions & Investments in an emailed statement: “There have been recent fraudulent schemes propagated over social media and messaging applications falsely claiming to be associated with AQR.”In June, “We placed a notice on our website homepage to provide individuals targeted by these schemes with clarifying information and to reiterate that AQR does not engage in any investment activities through social media or messaging apps.”
The statement added, “The notice also suggests that individuals targeted by these schemes should contact their local law enforcement. We continue to monitor and take proactive steps to combat these scams by pursuing their removal from platforms.”
Baupost has a fraud and phishing warning on its website and in recent weeks had the warning as a banner on its website homepage.
ed her “to be credible” and have people “respect what we’re doing here (and) the reasons why we’re doing it,” she added, which “struck a chord” and got her to quickly say “yes.”
Personal advocacy
On empowering women, Shannon O’Leary thought of a quote she came across: “Loud men have the rare ability to hear much over the din of their own voices.”
There’s a lot of ways to deal with that, said the chief investment ofcer of the $1.8 billion Saint Paul & Minnesota Foundation. But a lot of that is through personal advocacy, “whether it’s managing up to the board or CEO, or managing across as you’re meeting with institutional investment managers that are going to potentially go in the portfolio,” she said.
“Keeping that in mind is helpful,” O’Leary added. “And having that awareness — that you’re going to have to steamroll some people in order to get to where you need to go — is part of what we acknowledge.”
A manager who “was worth a lot of money” had been invited by her foundation’s investment committee to talk about a strategy, and he also intended on introducing a new chief
“Baupost has been made aware of fraudulent websites and social media accounts purporting to be Seth Klarman or purporting to represent The Baupost Group. The Baupost Group partnerships do not actively solicit or market to prospective investors on any social media or similar platforms, and are generally closed to new capital,” the statement reads.
“We take these matters seriously, are investigating the reports and, where practicable, are taking steps to address them. In the case of fraudulent social media accounts, we suggest that you block and then report anyone alleging to be Seth Klarman or alleging to represent Baupost directly to the relevant social media platform,” it said. A spokeswoman for Baupost declined to comment. A spokeswoman for Point72 declined to comment on impersonations of its founder Cohen.
Several groups impersonating Ackman and Pershing Square on social media have since been marked or labeled by content moderators as spam. A spokesman for the rm declined to comment.
A request for comment sent to Telegram was not returned by pub-
quarter of this year having provided €34 billion in nancing.
investment of cer who happened to be female, O’Leary said. She added that “he soliloquized for 25 minutes, and then remembered to introduce her,” but he “talked over her,” prompting O’Leary to call the manager after the meeting.
“I’m extremely disappointed in how you handled that meeting,” O’Leary told the man. “We have a smart committee. They had an 18page memo. They had questions for you. You disrespected their time. Oh, and by the way, when you introduce your chief investment of cer and then talk over her, zero people here believe that you actually have a viable succession plan. That, buddy, is your biggest issue right now with LPs.”
The committee later “observed behavior changes because of that conversation,” O’Leary said. After telling this story to a friend, she received a gong in the mail that — should “GP soliloquizing” ensue in another committee meeting — can be hit to bring in peace.
“I think people just aren’t as candid as they need to be,” said O’Leary, adding that she also told the manager to let her help him, “I’m one of your limited partners, and this thing you’re doing is a big issue for all of us.”
lication. Telegram’s founder and CEO, Pavel Durov, was charged criminally in France this month amid allegations that the social media platform is being used for illicit activity.
A growing threat
There’s been a meaningful increase in asset managers seeing names copycatted and used in fake scams, impersonations, and phishing, said Peter Greene, partner and co-head of the investment management group at law rm Schulte Roth & Zabel. Managers are bee ng up disclosures about potential scams on their websites and some are contacting the Securities and Exchange Commission and the Federal Bureau of Investigation, he added.
“In terms of, what do you do about it? It’s hard,” Greene said. Scams can originate overseas and “it’s probably a fool’s errand to try to nd the offending party and do something about it directly.”
Greene advises hedge funds to trademark their names. “It is easier to get an authority or a website operator to act on your copycat complaint if you, in fact, have a trade-
Moving forward
Honorees like O’Leary are focused on moving forward in order to advance their careers and “continuing to do more and better work.” She said she spends “very little time thinking about things that went well in the past” with her team at the Saint Paul & Minnesota Foundation.
“We celebrate our successes in the moment, and then immediately pivot to what has to be done next,” she added.
But this may not be the case for all, especially for those who are guring out if this industry is the right place for them to be.
For those who are starting out or are just a few years in — or even for professional with more than a decade under their belt — they may face self doubt. There will also be moments of high stress. On the road to SWIB, Fink said that ”there’s de nitely been ups and downs,” but she noted that’s “endemic to this industry.”
She pointed to author Milan Kundera’s novel “The Unbearable Lightness of Being,” which presents the idea that “if you’re faced with a choice, you never know if you made the right choice or not, because you never know what would have happened if you’ve made the opposite
mark,” he said. Regulators have issued warnings about the scams and warned potential investors to be careful.
The SEC keeps a list on its website of “unregistered soliciting entities” that “falsely claim to be registered, licensed, and/or located in the United States in their solicitation of investors” and its PAUSE Program lists “entities that impersonate genuine U.S. registered securities rms as well as ctitious regulators, governmental agencies, or international organizations.”
In June, the regulator updated its list, adding “24 soliciting entities, six impersonators of genuine rms, and four bogus regulators” and also warned that arti cial intelligence technology has “made it even easier for fraudsters to impersonate government agencies, organizations, and individuals in luring investors into scams.”
The Financial Industry Regulatory Authority (FINRA) has also issued warnings. A March statement on imposter investment scams noted that “there are new variants every day” and highlighted that the schemes rely on “source credibility — build-
choice” — and that’s “actually not true at all in investing,” she said.
In this industry, “what ends up happening is we have to deal a lot more with the uncertainty and also the awareness that we make mistakes sometimes and things go badly from time to time,” Fink added. And those who join “have to develop a certain amount of mental toughness and resilience in a way that, I think, in a lot of other elds you don’t have to.”
As time goes on, “it’s actually a privilege to age,” which is something women may worry about, but “it’s far better than the alternative,” said Acadian’s Young. “As a woman, I found that con dence has come to me more and more the older I’ve gotten.”
With so much going on in the markets that are out of one’s control, it could be hard to gure out the business, Miletti said. With problems and work, she still deals with imposter syndrome — all of which will always be there and needs to be confronted. She added that there’s also the matter of whether to face these issues now vs. later.
“But you end up gaining competence along the way,” Miletti added. “And you can learn a lot of skills if you’re willing to work.”
ing trust by claiming to be properly registered and employed by a wellknown rm — and they can be alarmingly convincing.” FINRA also highlighted imposter websites and documents and fraudulent products.
And in a recent July alert, FINRA even highlighted the rise in customer support scams.
Scams and impersonations are likely to grow especially amid the rise AI and new technology, said Amy Lynch, founder and president of FrontLine Compliance. Her rm works with institutional money managers and large sell-side rms and offers mock SEC exams and other compliance reviews.
“It’s an issue that is going to come up more and more as AI gets adopted and deep fakes (are created),” Lynch said.
And rms will need to have even more disclosures on their websites.
“For the unsuspecting public, it’s going to very hard to tell the difference between a fake video and a real one,” she said. “So, trying to put constraints around it will end up being the responsibility of the rms themselves and they will have to come up with policies and procedures.”
around a dangerous bubble. In turn, regulators globally have sounded alarm bells, calling for increased transparency around valuations across the board.
An enduring feature
Despite this, returns on private credit have remained strong over the last two years, and while overall buyout volumes may have dropped, our data shows that the share of capital market debt nancing has increased. So far in 2024, European debt capital markets have amounted to over €200 billion in leveraged loans and €85 billion from highyield bonds — easily their highest totals since the record-setting levels attained in 2021. Meanwhile, direct lenders reached a new quarterly high in the second
Additionally, there is demonstrable trend of a “ ight to scale” when it comes to fundraising. This month saw HPS Investment Partners raise one of the largest private credit funds on record, accumulating $21.1 billion for its Specialty Loan Fund — one of the largest sums ever raised by a traditional direct lending fund.
Direct lenders continue to be the preferred nanciers for small- and mid-sized companies. Private credit funds can cater to borrowers considered higher risk or ineligible for traditional bank loans — often the case for many fast-growing companies, which may be slow to turn an initial pro t. Additionally, private credit deals offer the advantage of upfront pricing in comparison to leveraged loans, which are more vulnerable to market uctuations (see Figure 3)
As a result, deal counts are on
the rebound in both the small-cap and middle-market segments of the direct lending market. Debtwire recorded 79 new small-cap deals in the rst quarter of this year, alongside a further 92 mid-cap deals. Ultimately, private credit is deserving of its place as a permanent complement to bank lending, and a critical component of the lending market long term, particularly in times of increased volatility. Its exibility and focus on the underserved middle- and lower-middle-market provide borrowers with tailored solutions beyond the constraints of traditional bank models, and remains a readily available source of nancing, to rival bank lending and private equity.
Figure 3 Indian equities consistently out-performed other major markets
One-year forward valuations: Nifty 50 P/E ratio, January 2009-December 2023.
Private Credit: Spectrum of Solutions
Wednesday, September 11 | 2:00 pm ET
Private credit remains at the top of the list for institutional allocators looking for diversification and higher return potential versus public credit. Even as capital inflows continue into the space, investors have become more discerning across a wider opportunity set ranging from corporate credit – still the core allocation in private credit for many investors – to asset-based private credit, fund finance, specialty finance and more – depending on their target portfolio objectives. Our panel of experts will share their macro perspective and its impact on current and potential opportunities across private credit. They will dig into the nuances of specific segments and their underlying market drivers. And in a shifting rate and credit cycle that has resulted in a wider dispersion of returns by managers, they double-down on the type of manager experience and expertise needed in private credit in order to deliver the risk-adjusted returns that investors seek.
REGISTER | pionline.com/private-credit-webinar24
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If Cash Is King…Then Don’t Overlook Your DC
Plan’s Capital Preservation O erings
Thursday, September 19 | 2:00 pm ET
We have found that the typical defined contribution (DC) plan menu o ers more than a dozen growth-oriented funds, an entire set of target date funds, and 2-3 bond funds. But when it comes to capital preservation funds, many plans have just a single o ering that rarely changes, may be woefully out of date, or selected “by default.”
In 2024, we think the combination of major shifts in demographics, regulations, and interest rates necessitates a more deliberate decision on your capital preservation fund selections.
In this webcast, DC plan professionals explain why they are revisiting this often-overlooked, but important part of their retirement line-ups.
Key topics include: The common, but unintentional, biases that may be embedded in your current DC plan design. Three reasons why plan sponsors are reevaluating their capital preservation options today. And a framework to compare the di erent capital preservation solutions and how to determine which ones may be a good fit for your participants’ retirement savings needs.
Defined contribution plans are a key component of benefits programs that support talent hiring and retention today, as recent surveys have revealed that plan participants place even greater importance on their financial security. Yet many employers continue to grapple with optimizing their DC plan – both in terms of the plan design and its administration as well as maximizing participant engagement. This expert panel explains how pooled employer plans, or PEPs, have emerged as an innovative solution that addresses participant needs across the savings and decumulation phases of their working lives.
You will hear from a pooled plan provider and a record keeper on how PEPs deliver both resource and cost benefits to plan sponsors via appropriate products, services, administration and education –often with some flexibility. The panel will delve into the service model and technology infrastructure that can meet the specific needs of each participating employer’s requirements – and provide the underlying context on PEPs as a growing solution for the retirement industry of the future.
REPLAY | pionline.com/pooled-employer-plans-webinar24 Sponsored by
Global CIOs
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are seen that are favorable to ATP’s portfolio or short if they are not.
“It’s a sort of switch,” Kjaer explained. “In normal days it’s just a part of the portfolio, it doesn’t do anything; and if it sees correlation between equities and rates go positive, in combination with losses in the bond portfolio — so a double condition — this combined signal in our analysis seems to be a decent predictor for when to take down risk.”
The signal is algorithm-based and uses intraday high-frequency data to estimate correlations and volatility as quickly as possible.
Kjaer says it’s a “zero-one” strategy and will be “more abrupt by its nature — that puts some limitations on how large the strategy can be.”
The second overlay looks at the need to adjust allocations according to changes in correlation and volatility, and is more gradual.
These innovative strategies are not to make money, but are very much defensive, Kjaer said.
“We are very humble in our ability to beat markets — we want to run these strategies, but we are not going to allocate massive risk budgets to (them.) We believe in general markets are ef cient and work well — we try to tweak a little and do it slightly better. These strategies are more defensive and should help us from running into a lot of trouble. We do expect them to generate positive returns, but a big part of the attractiveness is they are a defensive nature,” he said. “It is old-school quant,” he added, noting that executives can override the decision made by the algorithm.
Active exploration
The research also found some evidence that the bond risk-premium moves in tandem with the stock/ bond correlation: When the stock/ bond correlation is high, bonds often lose their defensive characteristics, “and this is clearly a concern,” Cavaglia said.
The research “allowed us to be early in understanding the consequences of the changes in the correlation between stocks and bonds, and therefore, to better calibrate our position in a changing macro environment,” he added. It’s also “enhanced our awareness of risks to the allocations of our policy portfolio. This and other inputs are well-reected in our recent decisions for our bene ciaries,” he said.
The stock/bond correlation is something that Mercer has been “looking at actively” too, said James Lewis, Mercer's U.K. CIO.
The economics and asset allocation team has drafted a paper inter-
up.” Where there’s a more stressed environment, “there will be some protection.”
Strategies that protect in cases of stocks and bonds falling in tandem are not new, he said, but “people are more used to what’s happened in the recent past,” Lewis said. “The really tricky thing is understanding when it will happen — so we think it’s better having an all-weather, broadly diversi ed portfolio.”
Commodity shocks, inflation
Some clients are looking for that more diversi ed approach, searching for uncorrelated alpha sources like hedge funds and commodities, which “can be a good way to introduce something which is less correlated with equities and bonds, and highly correlated with in ation shocks in terms of commodities,” Lewis said.
nally looking at stock/bond correlations, the shift in regime and, in particular, how markets have reacted post-COVID-19. “In 2022 we saw the worst year for equities and bonds since 1872 in terms of drawdown — it (was) really signi cant for markets,” he said. Global equities and bonds both posted double-digit losses in 2022.
The stock/bond correlation plays an important role in setting the asset allocation for the State of Wisconsin Investment Board's portfolio, said Stefano Cavaglia, a senior portfolio manager in the asset and risk allocation team. The Madison-based board manages $155 billion, including the $132.4 billion Wisconsin Retirement System.
The correlation impacts how the board measures total risk and its capital market assumptions.
SWIB’s staff conducted a joint research project with Robeco’s Lauren Swinkels, head of quant strategy, and Roderick Molenaar, portfolio strategist. Among the ndings was that, historically, the stock/bond correlation hovered between -0.3 and 0.3, a range that translates into a signicant +/- 20% range for total risk using a 60/40 reference portfolio.
Two
Sigma
CONTINUED FROM PAGE 6
and Tim Reynolds, the rm’s chief operating of cer “in driving forward the rm’s investment priorities and future growth.”
Siegel said in the release “Our vision has always been to build a sustainable organization driven by a systematic investment process, a commitment to investing in our peo-
Now the rm, which had a total $492 billion in global assets under management as of June 30 mainly as an OCIO, is working to understand “where do we go from here” in terms of markets and the relationship between stocks and bonds.
The team thinks one indicator of correlation is the level that real rates are at. “When high, there’s a more positive correlation; when low or negative, that’s when you tend to see negative correlation between stocks and bonds. But it’s quite hard to call when you get these regime shifts,” he said.
Mercer thinks that, over the very long term, having exposure to equity beta is “the best way to tap into longterm economy growth.” One bene t of a 60/40 portfolio is that, in a recessionary environment where central banks step in, “bonds (are) propped
ple and platform, and an evolution mindset.”
He added that “In light of the ongoing advancements in AI, I am more excited than ever about our ability to use our scienti c investment philosophy to generate differentiated returns, and I look forward to continuing to be part of this journey for years to come.”
While Overdeck said, "We are very grateful for the trust our investors have placed in us over our rst 23 years and have full con dence in
Commodities and their relationship with in ation has led to an overlay that Industriens Pension, Copenhagen, with about 220 billion Danish kroner ($32.2 billion) in assets, has put in place.
When the pension fund began investing in renewables and infrastructure, executives recognized that part of the buildout requires metal.
Given the commodity-related needs of the green transition, executives moved to hedge the rising costs that could be seen in related sectors and also “the need (to) secure domestic supply lines rather than being dependent on China or Russia for raw materials,” said Peter Lindegaard, CIO at the pension fund.
The team had a conversation with the board and decided to buy into a basket of commodity futures. The biggest part of it is copper, “because we think metals are going to be in high demand.” The hedging program is structured as a total return swap and an external manager looks after the position and rolls the contract.
“It’s an overlay to the portfolio where we think we’re also on this point protecting ourselves more against rising in ation because of the rising prices on raw metals. It’s a way of addressing a future need for raw materials and how that might impact our portfolio,” Lindegaard said.
The program was implemented toward the end of last year. “We’re looking at a world that’s in transition in a lot of ways, and that has some implications for how you invest.”
Executives also have a zero-coupon in ation swap based in euros in place, “which protects us against rising interest rates because of in ation” — effectively converting the nominal bond portfolio to an in ation-linked bond portfolio, Lindegaard added.
Carter, Scott, and our strong and deep leadership bench as they guide the rm forward.”
Major pension funds have been past investors in Two Signma including the State of Wisconsin Investment Board and the Sacramento County (Calif.) Employees' Retirement System, according to Pensions & Investments research center data. Two Sigma has approximately $60 billion in assets over management and approximately 2,000 employees globally.
CORRELATION FLIP-FLOP: ATP’s Christian Kjaer
Leech
middling performance on the back of a premature bet on central bank easing — seems likely to push back the day when the well-respected manager of $381 billion in xed-income assets is nally able to return to the front foot, analysts say.
Parent company Franklin Templeton, in an Aug. 21 SEC ling, said the SEC recently issued a Wells Notice to Leech, identifying him as a target of an investigation focusing on “past trade allocations involving treasury derivatives.”
The ling noted that with Leech stepping aside, Michael Buchanan — a 19-year Western veteran named co-CIO in 2023 — had been named as sole chief investment of cer.
‘Seamless transition’
In the ling, Jim Hirschmann, Western’s long-time president and CEO, predicted a “seamless transition,” with both clients and Western’s investment teams “in good hands.”
It remains to be seen how well Western will be able to roll with the latest punches.
Elbie Louw, a senior analyst with Morningstar, said the departure of a decision-maker with such a signicant in uence on investments throughout the organization has left Morningstar’s team working to parse his in uence, strategy by strategy, with the goal of reassessing “our level of conviction” on each.
Leech “was a signi cant investment in uence and decision-maker within the organization, speci cally on the macro side, so that for us is important to consider,” Louw said. “Analysts need to determine how his in uence differed across strategies — whether his involvement was from a macro point of view or on a day-to-day management basis — as well as considering the portfolio management team running the assets and supporting resources,” she said, adding that the
diligence effort is going to take “a bit of time.”
More departures
Leech, meanwhile, isn’t the only high-level investor at Western to step aside in recent months.
The latest monthly manager review by the $24.2 billion Public Employee Retirement System of Idaho, for whom Western was managing a $305 million global core full discretion mandate as of June 30, said recent departures from the rm included John Bellows, a portfolio manager and key member of Western’s global investment team; Chia-Liang Lian, the rm’s head of emerging markets debt; and Keith Luna, a long-time portfolio manager and analyst. Those departures were all employees with between 11 and 21 years at Western.
The Idaho pension fund’s reports show that even ahead of the Leech news, Western had been reporting net out ows, of just over $500 million in July and more than $1 billion in June. With Leech now absent from an investment process he dominated over the decades, analysts see those out ows accelerating.
Given Leech’s high pro le within the rm, “we anticipate further pressure on redemptions across the Western franchise,” wrote Dan Fannon, a managing director – equity research with investment bank Jefferies Group, in an Aug. 21 note.
That, in turn, should weigh on the parent company’s net ows, with Western accounting for more than 23% of Franklin Templeton’s AUM at the end of June.
For long-term strategies, Franklin Templeton reported negative net ows for six of the last eight quarters.
Morningstar analyst Greggory Warren, in an Aug. 21 report, warned that the sidelining of Leech, coming so soon on the heels of Bellows’ unexpected departure in May, “could lead to a loss of con dence for a rm that caters primarily to institutional clients” — prone to terminating relationships following the departure
budget from investment returns on oil and gas revenues by 2050, second only to the state’s sales taxes, supplying 33%, Clark said.
of key personnel or reports of government investigations.
The scrambling of Western’s investment leadership comes 10 years after another, even higher pro le move — “bond king” William H. Gross’s decision to bolt from Paci c Investment Management Co., the rm he founded in 1971, to join Janus Capital Group.
This time around, Franklin Templeton executives can only hope that history doesn’t repeat itself, or even rhyme.
PIMCO, which in September 2014 boasted well over ve times Western’s current AUM, suffered net out ows of more than $65 billion over the two quarters following Gross’ departure. PIMCO’s net ows stabilized within a year and
team placed Western Asset Management on CTPF’s watchlist in June, following the departure of Bellows, co-manager of the Western coreplus strategy Chicago Teachers had $550 million invested in.
Vinsons couldn’t be reached for comment on his investment committee’s Aug. 27 decision to terminate Western.
Other clients said determining whether or not their strategies were impacted by the trade allocations involving treasury derivatives at the center of the SEC’s investigation of Leech was the rst big hurdle they need to clear.
A statement provided by Oregon State Treasury said Western had informed OST that Oregon’s public pension fund money being managed
In a financial services industry where a ‘crystal clear chain of command and universal oversight of compliance’ have come to be accepted as best practices, Franklin’s family governance and complex business structure could increasingly be seen as a competitive disadvantage .
GRAIL PARTNERS’ DONALD PUTNAM
eventually turned positive again but it still took the rm roughly ve years to top the $1.88 trillion in AUM it reported as of Sept. 30, 2014.
Majority institutional Institutional clients account for roughly 65% of Western’s assets.A number of clients — including Kansas Public Employees Retirement System, the Public Employees’ Retirement System of Idaho and the California State Teachers’ Retirement System — either didn’t respond to requests for comment or declined to comment about the latest developments at Western.
Among clients who did respond, Fernando Vinzons, Chicago Teachers’ CIO, said in an email that his
by Western was “not within the scope of the SEC investigation.”
“We are carefully monitoring this situation to ensure prudent and responsible fund management continues,” the OST statement concluded.
A third institutional client, who declined to be named, said the latest developments at Western call for a considerable amount of due diligence and if that leads to a conclusion that Western, a very trusted partner, has changed, “we will act.”
“It has our attention. We’re on it and we’ll see how this turns out,” but sticking with good managers through tough times is often the key to achieving superior returns over the long term, the client noted.
Some analysts expect there to be institutional clients who prove less
patient.
Morningstar’s Warren predicts that with the departure of Leech, Franklin could suffer out ows of between 1% and 3% a year between 2024 and 2028, worse than his prior estimate of at to out ows of 2% a year.
Governance in focus
The latest developments shine a spotlight on parent company Franklin Templeton’s governance structure, industry veterans say.
In a nancial services industry where a “crystal clear chain of command and universal oversight of compliance” have come to be accepted as best practices, Franklin’s family governance and complex business structure could increasingly be seen as a competitive disadvantage, noted Donald Putnam, founder and managing partner of Grail Partners, a San Francisco-based investment banking boutique focused on the money management industry.
In contrast to competitors such as BlackRock and J.P. Morgan, “Franklin’s ‘chain of command’ is not straightforward, which can lead to lax oversight and slow reaction to bad actors,” Putnam said.
Morningstar’s Warren concurred, noting that the Western imbroglio now “speaks to our long running criticism of Franklin’s use of a hands-off approach to run its different investment franchises.”
A Franklin Templeton spokeswoman said the challenges facing Western now should be seen in a narrower context — an “isolated incident that was self-identi ed by Western.”
“Its scope is limited to speci c, past trade allocations,” she said. Still, the news about Leech’s Wells Notice has clearly jolted investors, prompting a hefty 12.6% sell-off of Franklin’s stock on Aug. 21 to $19.78. Franklin’s shares have since rebounded roughly 2.8% to $20.34 over the following four sessions, while the S&P 500 was essentially at over the same period.
federal royalties to one of the council’s funds, the $9.5 billion Severance Tax Permanent Fund. The council won’t see those revenues until scal year 2025, but council of cials estimate the impact would be more than $1 billion a year of new oil and gas revenue into the fund.
“This is a potential game-changer for the STPF, allowing for signi cant growth that will ultimately result in much higher distributions to the general fund,” Clark said.
The council will parcel out the returns, making more regular distributions back to the state, Clark explained. The hope is that these revenues from the fund will offset expected declines in the state’s oil and gas revenues as the world transitions to alternative sources of energy, he added.
“As oil and gas revenues start to decline over time, we will come in and replace those revenues in lockstep with that decline,” Clark said. “We’re rapidly becoming one of the largest sources of revenue for the state.”
According to the state’s most recent revenue forecast, the council is expected to supply 31% of the state’s
That percentage from the council could be higher should oil and gas prices spike, much like they did in 2022 and 2023 For example, the $30.2 billion Land Grant Permanent Fund, the largest pool of capital the council manages, has always received royalties for oil and gas production on state lands. However, future cash ow estimates are more than $20 billion higher than historical average receipts due to the rise in oil and gas prices, he said. In 2022 and 2023, the Land Grant Permanent Fund received more than $2 billion each year, a signi cant increase from the average annual ows of $760 million per year between 2015 and 2021.
If oil prices remain near today’s levels, council of cials expect that fund could continue to receive more than $2 billion a year over the next decade, he said.
Unstable revenues
Over the last 25 years, New Mexico had one of the highest revenue volatility of any other state in the country because revenues were so tied to oil and gas and sales tax, Clark said.
Revenues from increased production from fracking and oil price in-
creases gave the state unprecedented surpluses. A handful of years ago, policymakers started setting aside an increasing amount of the surplus to be invested by the council, knowing how unstable oil and gas revenues can be, Clark said.
State of cials started with diverting excess oil and gas production tax and federal royalty revenue to the $2.2 billion Tax Stabilization Reserve in 2019 and to the $7 billion Early Childhood Education and Care Fund in 2020. In ows to those funds weren’t signi cant until oil and gas prices spiked. The Early Childhood Education and Care Fund, for instance, received $2.8 billion in scal year 2022 and $3.2 billion in scal year 2023. This was an increase from $166 million in scal year 2020 and $335 million in scal year 2021.
In December, the council is set to embark on a strategic planning retreat.
As the council’s assets become a larger and larger contributor to the state budget, the council must take into consideration the distributions it sends back to the state, Clark said.
“Our current asset allocation is positioned to achieve its target returns with a focus on risk mitigation, but as an organization, we are also now assessing how a less conservative approach to risk could potentially impact state revenues in the long
term,” he said.
Bespoke allocations
Each of the council’s pools of capital has its own asset allocation.
The Land Grant Permanent Fund’s target asset allocation is 20% broad U.S. equity, 20% broad international equity, 15% private equity, 15% non-core xed income, 12% real return, 12% real estate and 6% core xed income.
If there’s an economic downturn and the portfolios are more tied to the public markets, then “soon the smooth revenues we’re providing the state don’t look as smooth anymore,” Clark said.
That consideration combined with projections of a high level of in ows into the funds the council invests is prompting a fresh look at its asset allocation, he said.
The in ows expected over the next decade present the council “with a rare opportunity in public fund investing to build asset allocations in our growth funds aimed at maximizing the compounding power of our returns,” the council’s scal-year 2024 plan says. That plan called for greater exposure to higher-returning risk assets, balanced between equity and credit over lower-returning risk mitigation/liquidity assets, and greater exposure to private market assets than publicly traded assets. The s-
cal-year 2025 investment plan will be presented to the council at its Aug. 27 meeting.
More money
The latest change in legislation is not the only source of new capital coming to the council. In May, the council started overseeing a new fund, the Higher Education Trust Fund, which the New Mexico Legislature seeded with a $959 million transfer out of another pool the council manages, the $2.2 billion Tax Stabilization Reserve Fund. Also in May, the council adopted an asset allocation for the new Higher Education Trust Fund that is similar to that of its Early Childhood fund with about 50% of its assets allocated to a combination of public and private equity.
The council is also embarking on a compensation study to ensure they are able to hire and retain the professionals needed to run the funds, Clark said.
“As we get more money to invest, the council will need to add more team members,” he said. Clark can add ve new team members to its about 30-member staff, “which is what we need,” he said.
“We oversee the third-largest sovereign wealth fund in the country;” but as the money continues to ow in, “we expect to be second,” he said.
with Minnesota State Board of Investment’s Jill Schurtz
Schurtz on climate, private credit, co-investments and staf ng up
Q | So there’s a big opportunity set?
Then there’s the impact of the work itself: “I don’t know many places where you can say, I wake up and for 840,000 people — there is something I’m going to do today that secures their retirement.’’
Earlier this month, the Minnesota state board reported a net investment gain of 12.3% for the $93.7 billion in combined de ned bene t assets that it oversees for the scal year ended June 30. The gain topped its composite benchmark by almost 50 basis points.
Before joining the state board in 2022, Schurtz led the St. Paul Teachers’ Retirement Fund Association as executive director and CIO.
This year, she is being recognized as one of Pensions & Investments’ Inuential Women in Institutional Investing.
In P&I’s latest Face to Face interview, Schurtz discusses new initiatives, particularly the board’s recent adoption of a climate roadmap aimed at capturing returns from the energy transition, investing in private markets and how she’s structured the team.
Q | Earlier this year, the board adopted a climate roadmap. What steps are coming out of it?
A | We’re excited about it. Both in absolute terms, but also the journey to get there. The board had an ESG resolution that was fairly broad and tasked the executive director and staff with coming up with a plan. They didn’t mandate an approach but asked us to be thoughtful and gave us time to do it. In the meantime, we also work with Meketa (Investment Group) on special projects and strategy issues.
Meketa issued three climate reports that provided the jumping off point — they provided background on the issues, different paths, outcomes, etc.
But one of the many things they did well was point out there’s no one-size- ts-all approach, and the investment team needed to decide what’s going to work for the state of Minnesota and this program.
We took a year and a half working with the entire team, our consultants, and, importantly, stakeholders. People care deeply about this on both sides of the issue.
It was important to get those perspectives. In the end, looking at all the research, talking to managers, the climate roadmap re ects our view that if it’s going to be sustainable and t in our mission, it needs to be returns-focused.
And to do that, we needed to gure out what is the opportunity set, where does it t in our portfolio, and how would we leg into this, in the same way we would any other asset class or any other investment theme. It’s got to compete fairly for capital.
A | When we nished our research, we concluded that it is absolutely doable given what we see out in the market. And a lot of that is driven not just by the need to address climate change, but as you know, I think when you combine three of the largest legislative actions — (the Infrastructure Investment and Jobs Act, In ation Reduction Act and the CHIPS and Science Act) — over the last couple of years, there’s an enormous amount of public capital coming to the space and that’s a catalyst for private capital.
That public capital, we think, has created a favorable return environment. And then in terms of the need, when you combine the number of targets that have been set for climate, the actual addressable market space is far larger than we could ever contemplate, but we think there are discrete areas where we can play. The grid is in desperate need of investment. There is a whole ecosystem of investible opportunities there — all the way from transmission to the grid itself, the software that’s needed to manage the grid, thinking about water generally as it applies to the grid, arti cial intelligence’s draw on the grid.
We think it’s a very vibrant opportunity set — battery storage, etc. Renewables writ large is interesting; it’s going to have a critical role to play. Our initial reaction is a lot of those returns have migrated downward to a point where that’s probably not necessarily our target. The other area that I think is really an interesting opportunity set (is) focused on two pieces: brown to green and then decarbonization. They overlap a little bit. We all talk a lot about energy transition — and it is very important — but for a whole host of reasons, we’re going to have fossil fuels for decades to come.
Q | You’re not excluding fossil?
A | We are not. And I would say two pieces to that. One, it’s how we think about it in the portfolio. And then what do you think of just the overall landscape — are fossil fuels going away in the next ve years?
They’re not. So one, if we accept that the universe is going to have fossil fuels for the next several decades, we can actually move the needle, we think, by making that universe greener. To the extent that you have people that are putting into practice the technologies to improve the outcomes in that space, you’re probably moving the needle more than being the 100th investor in a climate change fund.
Q | Is there a dollar amount tagged to the climate roadmap?
A | We’re starting out with what we think is a pragmatic number. We’re targeting $1 billion over the next ve years. Part of the reason
we’ve selected that number, and again, trying to be pragmatic and think about this in the same way we do all allocations, we think the majority of these opportunity sets will live in the private markets portfolio. So when we think about that portfolio is roughly $22 billion, we think that targeting kind of a pacing of roughly $200 million a year is consistent with our overall pacing on private markets and keeps us within our risk tolerances.
Q | How do engagement efforts and proxy voting fit in?
A | We think that it’s hand-in-glove. You can’t do one without the other. As a large institutional investor, we have a fair amount of voting power. It means we get a chance to speak to management. We get a chance to learn how they think about their process, their procedures, their outcomes, and have good inquiry and feedback loops. We do vote our own securities, but actually engaging with management is something that we intend to increase.
Q | Is there a way to quantify that?
A | To be fair, we want to do it in a structured way. If you go after everything, you accomplish very little. To date, we’ve targeted methane aring reduction as a key issue because we think that’s a meaningful driver to change.
We started this journey by taking one of our seasoned investment professionals and saying, would you please focus on proxy voting? And now would you please think about climate? Part of this plan was also to make sure that we resource Nathan Blumenshine. We promoted Nate (to vice president, director of stewardship). We created a division around him. We hired two additional professionals. Now he leading his own stewardship team. He reports into me. That’s not meant to micromanage him, it’s meant to say, we think this is important and we want to make sure we’ve got what you need.
Q | Let’s flip to private markets, which are currently about 25% of the portfolio, and private credit, in particular, is about 9%. What role are you looking for private markets to play in the portfolio?
A | I’ve inherited a really seasoned, successful private markets program, with a lot of gratitude and respect to my two predecessors: Mansco Perry and Howard Bicker. We’re looking at this as a different source of alpha for the portfolio. We’re looking to balance — just broad strokes when we think about asset allocation — public equities, xed income and our private markets. We know that when we invest in private markets, obviously we’re accepting illiquidity. So liquidity, we value greatly in a public pension plan. We have a covenant to meet
bene t payments. Given how highly we value liquidity, we know that we need to have an allocation that’s accretive to the overall portfolio over long periods of time. When you look over that three, ve, 10, 20 (years), since inception, this portfolio has added meaningfully on an absolute basis and relative to public markets. We know that every single year that’s not going to be the case. But if you’re a long-term investor, you have to look at private markets through that lens. It’s not a quarter by quarter, it’s not a year-by-year investment.
Q | We have written quite a bit about investors’ enthusiasm for private credit. Some now are talking about bubbles. Do you subscribe to that?
A | I think there can be a bubble in any particular asset class, any time. And yes, there have been remarkable in ows in this environment, and it’s worth taking note. Having said that, we are still open for the right manager with the right strategy to invest in private credit, again in our private markets portfolio. First, the real question is that balance. Can we get that same exposure in a liquid public markets manager? The key inquiry for us is how are we balancing liquid vs. illiquid and where can we catch the premium. We have not mandated that we’re going to do X percent direct lending or X percent in private credit. We’re taking that decision on a manager-by-manager basis, our level of conviction in that manager — do we think in this moment in time, that strategy makes sense.
Q | There’s the issue of AI, and how that’s fueling a surge in the need for power and data centers, which people say is an attractive asset class.
A | That need is going to continue and I think that feeds right back into that energy transition story. There’s going to be a need for more power. OK, what happens next? The data centers go into production, they need dedicated power or they’ve got to tap into the existing grid. There
aren’t natural technology and connection points today that can handle it. It calls for a lot of investment, and we think that’s a space where these funds focused on it are well-positioned. So there’s a giant energy transition story going on there for the grid and power.
Q | Are there other areas that you’re thinking about?
A | When we’re thinking about asset allocation in the portfolio, what we’re working through right now is we’re at this interesting inection point, a transition really in Fed policy, monetary policy. It’s presenting a transition point for how we think about xed income. We’ve been able to take advantage for the last two years, really, of letting cash work hard.
But we are fast approaching a point where having a 4% to 5% allocation to cash is not going to be our best and highest use of capital. Private markets, I’d come back to private equity a little bit if I could. I think the last two years have been challenging because exits have been dramatically down. We are starting to see distributions increase. Hard to say yet whether that’s a durable trend, but it is the rst time we’ve seen it in probably two years.
Q | Are there any global developments you’re watching — or in the U.S.?
A | A couple of things, and they’re almost more macro than anything else. I don’t think we can ignore the broad macro theme of how in ation is really living at the consumer level because that consumer does drive so much of how the U.S. economy operates. We have a thesis, that like many others, that the economy is on pretty solid footing in large part because we haven’t had industrial policy like this in the United States in a very long time. You have this industrial renaissance; you have hope that you have a vibrant middle class coming back into play. I think that bodes really well. We’re not going to bring everything back into the United States in terms of manufacturing, but when
you hollow out the middle class and all the manufacturing leaves the country, that’s not a great setup for long-term stability. I think that’s a theme that we want to watch very closely because if that theme starts to fray, that’s a negative indicator for the economy at large. So far, that theme is intact.
Then it’s really just thinking about the de cit and are we going to take some action writ large. Right now, we have a tremendous debt burden. That’s not sustainable. It hasn’t impacted the markets yet, but at some point, we’re going to have to make hard choices and address that overarching policy.
Q | What were your first-year goals when you came in?
A | First and foremost was to make sure that we had a common understanding about the mission. Next was to make sure that I had spent time myself with the senior team making sure that there’s a great deal of comfort on the current portfolio. One, to the extent I hadn’t worked with a manager before, making sure I got in front of them for an in-person meeting. Identifying were there any big picture projects we needed to undertake right away. And then making sure that we had structurally the organization that we needed to have. We tackled those pretty quickly. I am a strong believer in that each of us comes here as a leader, whoever’s sitting in this seat, that’s sort of job No. 1, but that cascades down the organization and it has to.
The rst thing was to make sure that we had an executive leadership team, not just one person in the seat. We took three exceptionally talented individuals who are already performing at a very high level and we gave them jobs and titles that t both their skills, their accomplishments and what we hope to achieve. They’re the internal investment committee now. So they’re engaged in every material decision that we make, both on the portfolio and from a management perspective: Andy Christensen, deputy executive director; Erol Sonderegger, deputy chief investment
of cer; and Andrew Krech, managing director of private markets and active equities.
Step two, then we took all the leaders of the dominant groups and formed a senior leadership team. We now have co-heads of private markets. They’re exceptional. Jonathan Stacy and Cassie Boll have been tasked with building out a team and we can talk about a couple of the initiatives they’re working on. They are building out a co-investment program and broadening our pipeline to increase our depth in the middle-market segment. We’re in that segment now, but we think broadening that makes a lot of sense.
Q | And they’re in the process of building that out in co-investments?
A | They’re in early innings. They’ve done some internal promotions and they brought on two analysts recently. We’re on the verge of probably one more senior hire in that space. So their efforts right now are making sure that every quarter we’re bringing in managers, presenting managers for investment, building out that team and energy transition. So as a part of the energy transition, they’re tasked with identifying that pipeline of who ts in that space.
Q | Had you done co-investments before?
A | We’ve done co-investments for quite a while through trusted partners, not directly. So this will be the rst time, and I think this is going to be a multiyear process. This will be the rst time that we tackle taking that on as a direct investment opportunity with our managers.
Q | Sounds like you’ve been doing a lot of hiring. How big was the staff when you came on and what is it now?
A | When I came on, we were talking between 30 to 34 staff members. As a part of that process we talked about earlier, of thinking about looking broadly across the organization, one of the things we tried to identify was where do we have places we need to add resources. So for example, that stewardship component, where do we need to make sure that we have appropriate redundancies because it’s such an important function.
We did a pretty fulsome analysis and we decided it would be benecial to have a robust analyst class so that we were training people inhouse to rise up in the ranks or frankly go out into the world of investments and be fully trained. At the end of the day, we’re at 46 people. A large portion of that has been in the analyst community and adding a couple of senior folks where we thought groups needed to be augmented.
Q | How’d you get the legislature to go along with that? I’ve heard it’s super hard to add staff.
A | I think that’s right. So 100% debt of gratitude to Mansco Perry. He spent a number of years really talking about what’s our mission, how do we do it? The assets we’re responsible for. How that’s grown over time, but staf ng hasn’t, and not just the assets but the mandates that we have responsibility for. It took a number of years. Through those conversations, he actually got approval to add staff. It’s a heavy lift to go from approval then to undertaking the process. So I don’t think I could have asked for a more generous setup.
NFL PE
CONTINUED FROM PAGE 2
run sports leagues in the world in terms of permitting private equity rms and other institutional investors to buy in.
“The NFL is very concerned about reputational risks and the strength of their brand,” she said. “They are very sensitive to optics.”
Liquidity providers
Until now, the NFL saw no need to open its ownership and allow private equity investments in the league.
“However, as valuations continue to rise, the league sees that having private equity capital available could bene t the league and its owners, especially where liquidity might be needed,” Walters stated. “Not to say that the other professional sporting leagues needed access to private equity capital, but the NFL is the largest, most pro table sports league in the world and has never seen the need for such a thing. The league is a cash cow.”
Indeed, Sissel noted, the very fact that NFL team valuations have been soaring — the Dallas Cowboys are now worth more than $10 billion, for example — makes the entry of deep-pocketed private equity entities more attractive and perhaps even necessary.
“Not many individuals have billions of dollars laying around to buy a team,” she said. “But private equity rms do have it and they can purchase these clubs with equity rather than taking on debt, which makes them even more attractive.”
However, the NFL will likely not move quickly and haphazardly into this brave new world of institutional ownership.
The league is easing into this process, Walters indicated, and part of that is setting the ownership percentage lower than other professional sports leagues. “Though if all goes well, that 10% (maximum) stake could be increased at some point down the road,” he added. “Other restrictions are put in place to provide some stability in an opaque market, such as the required six-year hold time.”
By comparison, other major sports leagues, including the NBA and MLB allow up to 30% ownership by institutional investors.
The NFL initially wants to bring in private equity rms that are already established in the sports space, which happens to include some larger private equity rms such as Arctos, Ares Management, Sixth Street or CVC Capital Partners.
Among pension fund investors and endowments committed to Arctos Sports Partners Fund II are the Kentucky Public Pensions Authority, Oregon Public Employees Retirement System, and University of Texas Investment Management Co., or UTIMCO. Ares Sports Media & Entertainment Finance fund in 2022 raised money from Canada’s CDPQ, CalSTRS and Maryland State Retirement and Pension fund, according to P&I and PitchBook data.
“The only outlier is Blackstone, (which) has not previously acquired a stake in a professional sports team,” Walters noted. “However, Blackstone is the largest household name in private equity. The rm can lean on the expertise of David Blitzer, who is head of the rm’s tactical opportunities division and has personally invested in several professional sports teams.”
Blitzer owns stakes in the Philadelphia 76ers of the NBA, the Washington Commanders of the NFL, New Jersey Devils of the NHL, and Cleveland Guardians of MLB, among many other sports teams around the world.
It’s unclear whether the NFL will expand its initial list of permitted private equity buyers, Walters cautioned. As private equity rms enter the NFL, not a whole lot will change in the grand scheme of the league, “as these stakes are completely passive and do not hold voting rights within the team.”
Sissel said private equity rms may initially target underperforming clubs — like her hometown Chicago Bears — rather than the more highly-valued teams like the Cowboys or New England Patriots.
The Bears have had only one winning season in the past ten years. Similar to an undervalued and underperforming company targeted by a private equity rm, she said, the Bears might be a very appealing candidate for an alternatives rm looking to enter the NFL, given the team’s long history, huge popularity, as well as the large population of its home base.
Profits over time?
Hanging over these potential deals is whether investments in NFL team will be a pro table investment, given the limited number of exit routes and the potential for a mandatory pro t-sharing arrangement with the NFL.
“The question in my mind is how is this going to work in ve to 10 years ... Private equity is long term but not forever,” said Mark T. Wilhelm, partner specializing private equity at law rm Troutman Pepper Hamilton Sanders.
With a short list of private equity rms permitted to invest in NFL teams and a close to zero percent chance rms will take a team public “how will (private equity) funds get liquidity”, Wilhelm said.
What’s more, successful exits assume the value of a team will go up over time, he said. Risks swirling around the NFL including injury issues and concussions. Also, there is a risk that there will be challenges to negotiating lucrative media rights in the future, Wilhelm added.
“All of these risks play into the valuations” these private equity rms can put on teams, he said.
On the plus side, the private equity rms’ investment in NFL teams could provide additional deal ow by leveraging businesses outside of the NFL footprint but closely connected to NFL teams, such as the real estate near an NFL team or a business providing services to the NFL team, Wilhelm said.
A spokesperson for consortium of investors comprising Blackstone; Carlyle; CVC; Dynasty Equity; and Ludis, stated: “We are pleased to have secured this provisional approval following the NFL’s thoughtful and robust process.”
High-profile owners
The NFL already has a number of high-pro le gures like Blitzer with an alternative investment background, Sissel added.
Josh Harris, the co-founder of private equity giant Apollo Global Management, purchased the Washington Commanders for $6.05 billion last summer. David Tepper, the president of global hedge fund Appaloosa Management, owns the Carolina Panthers, while Mellody Hobson, president and co-CEO of Ariel In-
vestments, is part owner of the Denver Broncos. Walters expects team valuations to bene t from this new entry of investors.
“All 32 NFL teams are desirable investments,” he said. “There are only 32 NFL teams, so to own a piece of any of them is a big deal. You can think of all 32 teams as crown jewel assets, as being an owner of an NFL team is such an exclusive club.”
Moreover, Walters cited industry chatter that several NFL owners are open to selling a stake in their team, such as Terry Pagula, the Buffalo Bills owner, as he looks to helpnance the costs of a new stadium being built.
“So, all teams can bene t from such a change, not just the ‘cream of the crop’ franchises,” Walters added.
Profit-sharing talks ongoing
Sissel cautioned, however, that a private equity fund invested in an NFL team requires a very different “skill set” from managing traditional investments like stocks and bonds.
“Things could go horribly wrong if they don’t pick the right people to make these investments,” she noted.
Rich Nuzum, executive director of investments and global chief investment strategist at consultant Mercer, commented that institutional investment in sports franchises is not new.
“It’s been niche, he said. “We have clients that are interested (in sports teams) and a lot of clients who think that’s not for us. We’ll do other things rst. And I think part of it is this concern that there’s lots of non-economic bene ts to being an owner of a sports franchise, and so maybe that depresses the forward-looking expected returns, even though the historical returns have been quite strong.”
Meanwhile, talks over sharing of pro ts are in ux.
The NFL has reportedly told team owners and investment rms that the league wants to take a portion of private equity pro ts on future sales of ownership stakes.
But Walters of PitchBook does not think this issue will deter investors from buying stakes in clubs.
“The league informed these rms of this decision, and no rms decided to back out because of it,:” he said. “While not one of the permitted NFL investors, Blue Owl has a special agreement with the NBA of similar stature. Blue Owl can invest in as many NBA teams as it wants, compared to the maximum of ve teams for other rms. In exchange, Blue Owl is required to share an undisclosed amount of its pro ts with the league. While the agreement isn’t quite the same, it is not the rst time a professional sports league has implemented such a structure.”
Furthermore, status as one of the select few rms allowed to invest in the NFL is something these rms likely don’t take lightly, and “if one of the criteria they must meet is giving some of their proceeds back to the league, then so be it.”
Walters added he thinks private equity rms are “still as eager as ever to invest in the league, regardless of this piece of the puzzle.”
Sissel commented that the NFL clearly understands private equity better than most and wants to get as much out of these investments as possible. “Any private equity manager worth their salt will need to think long and hard before considering an investment in an NFL team because it may not be in the best interest of their LPs,” she added.
UK pensions
Partnership Investments, an LGPS pool in the U.K. managing £26.3 billion of assets on behalf of funds, shows the average private markets allocation by the other seven LGPS pools is 20%, vs. 41% alone for LPPI itself, and 48% for the Maple 8.
A big private markets focus is one of the six key attributes of the Maple 8, according to Urwin.
The C$632.3 billion CPP Investments, Toronto — which runs the Canada Pension Plan — is the largest of the eight pension funds and had a 31% allocation to private equity and 8% each to real estate and infrastructure as of March 31. The remainder of the fund was invested in listed equity, government bonds and credit. The Ontario Municipal Employees Retirement System, Toronto, had C$128.6 billion in assets as of Dec. 31, with 21% in infrastructure, 19% in private equity and 15% in real estate.
Interestingly though, Canadian plans and U.K. pension funds differ in geographic terms of their infrastructure allocations.
Keith Ambachtsheer, president of KPA Advisory Services and executive-in-residence at the University of Toronto’s Rotman School of Management, said the domestic share of infrastructure investments for Canadian pension funds is only 7% — vs. 67% for U.K. funds.
“Why? Because (the) U.K. have been promoting/facilitating infrastructure investments while … Canadian governments have not done so,” he said in an email. “As a result, Canadian funds own much more infrastructure investments outside Canada than inside.”
Top talent
There’s nothing wrong with the CIOs and investment management expertise in-house at some of the LGPS funds, or at the asset pools, sources said. But a Canadian model and more direct-run investments and allocations will require more.
CPP Investments alone has 2,125 employees, and its direct private equity team alone has more than 60 professionals in Toronto, London, San Francisco and New York. Canadian plans have the internal investment prowess and the “commercial levels of compensation for the investment team” — as Urwin puts it — to do that.
“The combination of scale and independent governance would allow the future LGPS to establish an operating model that will attract and motivate high-quality people to run the future LGPS outside of the local government environment,” said Steve Simkins, partner and public services leader at U.K. consultant Isio. “Government will need to be bold and to understand the realities of the market for top talent, but the perception risks of having many very well-paid civil servants will be dif cult to manage.”
Home bias
Aside from infrastructure — in which the Maple 8 have been building overseas presence to gain access to private markets deals for the big-ticket allocations they have to invest — Ambachtsheer noted that Canadian plans have a home bias, and have managed that without government intervention.
In a recent paper, “Should Canada Require its Pension Funds to Invest More Domestically,” Ambachtsheer
and his co-authors said that Canadian pension funds “allocate a disproportionately high percentage of their public equity investments to Canadian equities.” Figures in the paper show that, in 2022, Canadian funds invested 18% of their equity portfolio in shares of domestic-listed stocks, compared with a global market portfolio that allocates 3% to Canada.
Among asset classes including xed income and real estate that provide steady income streams, Canadian pension funds also favor domestic assets, allocating a greater proportion of their capital to their home country. The average domestic share of xed-income assets was 88% in 2022, while the paper also cites 2022 work by CEM Benchmarking’s Alexander Beath and others that found Canadian pension funds “invest heavily in the real estate of large Canadian cities such as Toronto, Montreal, and Vancouver where they prioritize development in Canada before scaling up internationally.”
Across 86 England and Walesbased LGPS funds as of March 31, 2023, the average private markets allocation was 24%, according to data compiled by the Local Government Pension Scheme Advisory Board. U.K. equities accounted for 6% of total assets.
The statistics are interesting given Canadian plans — like U.K. pension funds — have been accused of not investing enough in their domestic markets. In March, 92 Canadian business leaders wrote to Canada’s Minister of Finance Chrystia Freeland to bemoan the lack of Maple 8 investment in the domestic market — citing gures showing that Canadian pension funds overall have reduced domestic listed equity holdings to less than 4% as of end2023, from 28% of total assets at the end of 2000. The letter also said that Canada’s eight largest pension funds invest more in China (about $88 billion) than in Canadian listed and private equities (about $81 billion).
Besides, said Gordon Clark, senior consultant and emeritus professor at Oxford University’s Smith School of Enterprise and the Environment, consolidation isn’t “a recipe for in-
The key is the independent boards that oversee the governance, management and administration of the plans.
CPP Investments, for example, was set up to “operate as a professional investment organization with a commercial, investment-only mandate,” according to its website. The pension fund is run in accordance with the CPPIB Act, and CPP Investments — which runs the assets — is overseen by an independent, professional board of directors.
The question for a consolidated or merged entity in the case of the U.K. is “how do you build a governing structure such that you have representatives of different local government employers?” Clark said. “I think that remains to be explained or settled — just how do you govern such an entity with different shareholders, and what kind of representation and size of governing board would you like,” he said.
Inspiration on a good governance model is the key attribute that Mercer’s Hudon thinks the U.K. could learn from Canada.
“The management of complex pension arrangements is best done by professionals, not trustee boards, who may not always be organized
vesting locally. I think (it’s a recipe) for extending the geographical reach of investment, as well as the sophistication of investment products,” he said.
Excellence in governance …
The Canadian plans “are well-governed organizations. It does relate back to, roughly speaking, three decades of progress,” Urwin said.
well enough, or have the right level of expertise, to take decisions swiftly, in the context of highly volatile and increasingly complex nancial markets. In that respect, the governance under the ‘Canadian model’ is worth considering,” he said.
LGPS funds in the U.K. have a pensions committee, made up of elected members from the council of that local authority, a local pension board of member and employer rep-
is best to keep the government at arm’s length so that the political agenda does not interfere with the duciary duty of pension schemes to secure pension bene ts for members,” similar to the way retirement assets for corporate sponsors are kept separate from company assets, he said.
But the setup of LGPS funds means it’ll be tough to replicate the Canadian model.
“Additionally, the Canadian government has allowed their pension plans to be run at arm’s length, enabling independent decision making and access to the best resources,” Simkins said. “The governance challenges in the LGPS with the main employer also being the governing body, are well understood and it falls way short of best practice,” he said.
Adaptation possible?
resentatives, and some also have working groups to focus on various areas, such as ESG. Their rules can only be changed with the approval of parliament.
Local Pensions Partnership Investments said in an Aug. 14 commentary one of the four key characteristics that makes the Canadian model more effective than the U.K.’s is its “more independent governance — unlike the need in the U.K. for parliamentary approval on rule changes.”
LGPS governance has been a topic of discussion in the U.K. for some time, and has been the subject of a Good Governance Project by the Local Government Pension Scheme Advisory Board. Among other things, that review recommended that a common standard on governance be developed for LGPS funds and pools.
… and government influence
Politicians have been very clear about how they want retirement plans in the U.K. to power economic growth. The push for consolidation and to “unleash the full investment might of the £360 billion (LGPS sector) to make it an engine for U.K. growth,” as the government said in a news release at the time of announcing the retirement review, ties in with politicians’ desire for retirement plans to inject cash into infrastructure and unlisted companies.
“In a sense it has been a very interesting time in terms of government in uence,” Thinking Ahead Institute’s Urwin said. “The stakeholders of these asset owners have basically stepped up their interest and wished to in uence the organizations that they are sponsors of or stakeholders in. From that point of view, public pension funds, local government pension funds have a very obvious sponsor who has been very much in the background.”
But the CPPIB Act, for example, “safeguards against any political interference,” according to the pension fund’s website. The 2006 OMERS Act established a new governance model for the pension fund that eliminated the role of the Province of Ontario as plan sponsor, its website said. And while OTPP has two sponsors — the Ontario government through the Minister of Education and the executive of the Ontario Teachers’ Federation — it is governed by an independent board.
“The creation of a ‘Canadian model’ will inevitably require government intervention in the early days, through the enactment of relevant pension legislation,” Mercer U.K.’s Hudon said. “However, over time, it
The answer is yes, with work and plenty of careful thought because of the legacy issue of the LGPS funds.
But lifting the attributes that make Canada’s Maple 8 so impressive — namely their governance models and ability to invest in the best opportunities they can — may actually lead to the opposite outcome to what the U.K. government is looking for.
“Arms-length governance based on best practice will allow the future LGPS to be more effective, but the longer the arms, the less in uence the U.K. government will have over the level of investments in the U.K.,” Simkins said.
“The Canadian pension plans invest in the best investment opportunities around the globe, which might not meet the chancellor’s objectives, but mandating U.K. investments would also interfere with duciary duties of those in charge of the new scheme.”
The challenge, he said, “will be to strike the balance between good governance and delivering signicant future investment in U.K. PLC. How long should the arms be?” Simkins said.
And Richard J. Tomlinson, CIO at Local Pensions Partnership Investment, said in the commentary that a step-change is needed in the retirement “and investment policy environment to make investing in the U.K more attractive. The government should continue on its path to planning reform, introduce formal incentives for investors in the U.K., such as tax credits, and prioritize creating more domestic private market opportunities that deliver the longterm, stable returns many pension funds look for.”
Other destinations?
A spokesperson for His Majesty’s Treasury said Reeves’ future travel plans in relation to pension fund-related learnings could not be disclosed for security reasons.
But one market she might choose to look at — as previous governments and chancellors have highlighted — is Australia.
The country’s almost A$4 trillion ($2.71 trillion) superannuation market has long been cited for excellence in de ned contribution plans. That market is also undergoing a period of consolidation — but Australian supers are very focused right now on foreign investment, such as the A$335 billion AustralianSuper, a big investor in the U.K., which in March disclosed plans to invest more than £8 billion into large-scale investments across public and private investments over the next six years.
FACT-FINDING MISSION: U.K. Chancellor of the Exchequer Rachel Reeves
CANADIANS LIKE HOME COOKING: KPA Advisory Services’ Keith Ambachtsheer
Jeenah Moon/Bloomberg
Robert Tannenbaum
Pierce
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focused on some existing hedge fund-of-funds that had disappointing results during the nancial crises,” he said. “As a result, by early 2012 we had terminated those relationships.”
In 2012, another initiative Pierce started was a direct lending strategy with private credit manager Tennenbaum Capital Partners (which was acquired by BlackRock in 2018). Among other private credit funds, SBCERA also invests in Ares’ Private Credit Solutions Fund and Senior Direct Lending Fund III, according to its latest annual report.
“The main philosophy that drove us then — and now — is that the more return we can get from income, the less we have to rely on capital gains to meet our funding goals for the plan and provide a secure retirement for our now over 48,000 members,” Pierce noted.
SBCERA currently has a 7.25% assumed rate of return.
Allocation changes
During his tenure as CIO, SBCERA’s asset allocation has undergone some signi cant changes, Pierce said.
“Private equity has increased, while real estate has decreased,” he stated. “We’ve eliminated timber and commodity futures while adding
Escalation
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“They say it feels like we are pushing too hard.”
Participants should try for an annual retirement savings rate of at least 10% of pay "with the hopes that this number will grow higher with the addition of certain employer discretionary or matching contributions," he said.
His company provides clients with an annual “plan utilization review,” which compares plan participation and participant savings rates against three benchmarks: the previous year's numbers, the industry average for their company type, and "an aspirational goal," he said. His company discusses communication strategies and plan design options to improve participation.
Plans that use opt-in vs. opt-out cite several reasons for their choice, said Michael Volo, principal andnancial adviser for CAPTRUST Financial Advisors.
“Some may be on antiquated payroll technology” that doesn’t work with their record keepers’ platforms, he said.
The primary reasons for sponsors avoiding the opt-out strategy "are increased employer cost and workforce t," Volo explained. "The cost
physical commodity infrastructure and energy (assets).”
He explained that commodity futures had zero income, and timber, “much to our disappointment had little to no income over our hold period.”
“Our income-focused philosophy reinforces an income component to our asset choices, and our view is that all assets must compete for allocation,” he explained. “Strategies that rely entirely on speculative price change as a return driver would need to have an enormous upside potential vs. a relatively straightforward income investment of comparable risk.”
The attraction of holding “real assets” like physical commodity infrastructure, he noted, is “the income we receive and the value proposition they promise.”
As of June 30, the pension fund’s actual allocation was 19.9% private equity, 13.3% U.S. credit, 12.4% U.S. equities, 11.1% non-U.S. credit, 8.1% international equities, 6.8% cash, 6.4% absolute-return strategies, 5.3% real assets, 5.1% emerging markets debt, 5% non-U.S. core xed income, 3.7% real estate, and the remainder in U.S. core xed income.
SBCERA returned a net 9.3% for the scal year ended June 30, 2024, below the 10.3% return of its benchmark. For the three, ve and 10 years ended June 30, it returned an annualized net 4.7%, 8.2% and 7.1%.
Domestic equity with beta overlay led all asset classes over the latest scal year with a net return of 20.6%;
issues is related to plans that may have to provide an employer match on the increased employee contribution. If that is the case, employer costs could be substantially higher in an opt-out environment vs. the participant having to opt in because participant inertia leads to inaction."
Lower-wage problem
Clients with a lower-paid workforce say an opt-out auto escalation would be “unfeasible” because they don’t want employees to feel challenged if they are already being auto-enrolled and receiving a company match, Volo said.
A majority of his clients’ plans offer the opt-out approach for auto escalation. “It’s a great solution,” he said. “It simpli es decision-making for the participant.”
For clients on the fence about the opt-out strategy, some will review the strategy in the future, perhaps offering it to so-called undersavers and/or new employees, he added.
“There is very little downside to implementing auto escalation on an opt-out basis,” he said. “We don’t hear much employee blowback.”
Whatever strategies clients use, "a rule of thumb is to aim to have a contribution rate of 15% of compensation or greater," Volo said. "This encompasses both employee and employer contribution sources."
Choosing opt-out vs. opt-in de-
P&I Events Calendar
followed by the non-U.S. credit composite at 16.3%; alpha pool composite at 12.7%; U.S. credit strategies, 9.8%; real assets composite, 9%; international equity with beta overlay, 8.3%; global xed income with beta overlay, 7.5%; private equity composite, 7.2%; and emerging markets debt composite, 4.5%. The poorest performer was its real estate composite, which returned a net -7.3%.
All assets in the portfolio are externally managed, Pierce said. NEPC has served as the investment consultant since March 2003.
Pierce also said he had “less condence in domestic public equity.”
“As has been well documented, until just recently (August), nearly 90% of the returns of the S&P 500 (stock index) were driven by the top 10 stocks. That is a level of concentration that doesn’t engender a lot of con dence,” he said.
Investment team approach
Pierce currently works with three senior investment of cers — Amit Thanki, Jake Abbott and Thomas Kim.
“Rather than align our team by asset class, I’ve divided up the program responsibility by manager relationships, while trying to give each investment of cer a sliver of the entire portfolio where possible,” Pierce explained. “This has two advantages in my view. First, it focuses the team on our existing portfolio, and importantly allows us to access other assets the managers may invest in when those assets are attrac-
pends on the corporate culture, said Scott Boulton, principal and senior consultant at Fiducient Advisors. He detects a gradual, greater willingness among clients to offer opt-out auto escalation.
Resistance is based on employers’ belief that opt-out is “too much of an overreach” for auto escalation, he said. The drawback to opt-in is that “you are asking people to take action,” he said. “If they don’t understand it, they don’t do it.”
Boulton recommends clients establish a negative election like they do with health care, requiring annual renewal. Asking employees to con rm participation in auto enrollment and auto escalation each year using the opt-out approach should improve usage, he said.
Plans are slowly moving to greater use of the opt-out strategy in auto escalation, according to T. Rowe Price research. In 2014, the ratio of opt-in to opt-out among plans offering auto-escalation was 63%-37%. Last year it was 51%-49%.
“People are getting more comfortable,” said Rachel Weker, vice president and head of marketing retirement plan services at T. Rowe Price. “These things take time.”
When participants are defaulted into auto features, “the vast majority don’t opt out,” she said. “The data reinforces the value of opt out.”
T. Rowe Price recommends a goal
tive to us.”
Pierce emphasized that he and his investment team are “asset-focused rather than fund-focused. By focusing on assets, we can consider the relative attractiveness of those assets relative to the entire suite of assets available to us, and we allocate to those that we believe (will have) the highest return for the risk we are taking,” he added. “We describe this approach as ‘all assets must compete.’”
‘The more return we can get from income, the less we have to rely on capital gains to meet our funding goals for the plan.’
SAN BERNARDINO COUNTY (CALIF.) EMPLOYEES’ RETIREMENT ASSOCIATION’S DONALD PIERCE
Pierce also said the board members at SBCERA are “very supportive” and that they have “broadly delegated” investment decisions to the investment team. This relationship allows the investment team to be “nimble enough to make quick decisions” and also allows them “to take advantage of market opportunities that may have been otherwise lost if we had to wait for the next scheduled board meeting.”
of 15% annual retirement savings. To encourage greater contributions, it has created personalized videos for participants focusing on salary, contribution rate, account balance and age. “Employers can do more education and make it as easy as possible,” she said.
Auto-enrollment rates
Weker also said more DC plans are more willing to offer higher auto-enrollment default rates.
Among plans offering auto-enrollment, T. Rowe Price data shows the once-traditional 3% default rate declined to 28% of plans last year vs. 43% in 2014. During this period, default rates of 6% or more rose to 38% of plans vs. 24% in 2014.
For auto-increase, 87% of plans had a default increase of 1% of pay last year compared to 70% in 2014, according to T. Rowe Price. Thirteen percent defaulted to 2% of pay last year compared to 30% in 2014.
Auto enrollment continues to produce a dramatic difference in participation vs. non-auto-enrollment plans. Last year, the participation rate in auto-enrolled plans was 83% vs. 36% for non-auto-enrolled plans, according to T. Rowe Price data on a participant-weighted basis. Ten years earlier, the ratio was 86% to 49%.
The percentage of T. Rowe Price-client plans using auto-enroll-
Economic outlook
With respect to the current macroeconomic climate, Pierce says his biggest focus is on the Federal Reserve’s monetary policy.
“While I would like to have (interest) rates stay at these levels for longer, it seems the market, at least for now, is pricing in rate cuts in September,” he said. “Higher rates coincide with higher income for SBCERA’s portfolio. However, our fund is positioned well for various economic climates and is prepared to adapt as the rates shift over time.”
Pierce noted that at the end of 2021, SBCERA had a very sizable allocation to oating-rate debt — with an effective duration of 0.25 years — and the portfolio was “defensively postured largely because of what we saw as a very extended equity rally.” As a result, he observed, “our credit portfolio did terri c in this time period.”
While the portfolio can be subject to market volatility like everyone else, he added, with “a strong bedrock of income we know we will be able to weather bouts of volatility by opportunistically buying when assets are priced favorably.” The ability to buy assets when markets are in disarray is a very important component of his approach, he said.
In the event of a recession — which can be challenging to credit assets in general — Pierce counters that he has “con dence our managers have done a good job underwriting risk.”
ment was 68% last year compared to 51% in 2014.
Vanguard Group’s annual survey of its record-kept clients found similar results to those of T. Rowe Price. Among retirement plans offering the opt-in approach to auto escalation, the participation rate was 26% last year. Since 2014, the rate has ranged from 19% to 33%.
“Historically, some sponsors questioned the cost of auto-increase,” said David Stinnett, principal and head of strategic retirement consulting at Vanguard. “Some sponsors thought it was too aggressive or too paternalistic.”
Stinnett said the rst goal for auto-enrollment plans is to get the initial default “suf ciently high” at 4% or more.
Vanguard clients have followed his advice. Last year, 60% defaulted 4% or more compared to 27% in 2005, according to record-keeping data. During that period defaults of 3% or less dropped to 40% from 73%.
“You want to auto-increase so it (the auto-enrollment rate) doesn’t stay there,” he said. “We tell sponsors to make sure you have both features.”
Among Vanguard DC clients, the percentage offering auto enrollment was 59% last year vs. 36% in 2014. Last year, the participation rate was 94% in auto-enrollment plans vs. 67% in voluntary enrollment plans.
