“Performance,” “plumbing” and “people” were key to Joseph A. Dear at the $282.5 billion California Public Employees' Retirement System, and he made strides in each of those areas in his five years as chief investment officer of the nation's largest defined benefit plan.
Performance didn't just have to do with improving investment results at CalPERS, but also with empowering employees, having the necessary operational support framework (the “plumbing”) to back up investment staff and hiring the right people, said Janine Guillot, CalPERS' former chief operating investment officer.
“He wanted to see improved results across the entire organization,” said Ms. Guillot, who was hired by Mr. Dear.
Mr. Dear died Feb. 26 from prostate cancer.
He joined the Sacramento-based pension fund in March 2009, near the end of a fiscal year in which it lost 25% of assets. During his tenure, Mr. Dear restructured CalPERS' money-losing real estate portfolio, moving from highly speculative investments to income-producing properties, while increasing alternatives such as private equity.
Aided by an upward turnaround in the stock market, CalPERS increased assets by more than $100 billion while Mr. Dear was there.
As he oversaw changes to the pension fund's investment portfolio, he also had to deal with the fallout from an influence-peddling scandal revolving around alleged bribes former CalPERS board member Alfred J. Villalobos, acting as a middleman for investment clients, paid to then-CalPERS CEO Federico R. Buenrostro. The payments were supposed to help Mr. Villalobos' clients win CalPERS investment contracts, state law enforcement authorities have charged.
Those events had occurred before Mr. Dear joined the system.
CalPERS CEO Anne Stausboll credits Mr. Dear with leading the fund's financial recovery, while implementing new risk management procedures to reduce the chance of major write-downs in the future and pushing money managers to lower fees.
Mr. Dear also pushed for new ethics rules to ensure there was no favoritism in the picking of money managers, Ms. Stausboll said.
Mr. Dear, she said, took over an organization in turmoil, and turned it around.
“Joe stood for integrity, and everyone knew it,” Ms. Stausboll said.
CalPERS board member J.J. Jelincic, who also is a CalPERS investment officer, said Mr. Dear helped restore professionalism to the investment office.
Soft-spoken and serious
Those who knew him say Mr. Dear was soft-spoken and serious, but still was approachable and down to earth and liked to crack jokes with his colleagues.
“He was serious without taking himself seriously,” said Mr. Jelincic.
Ms. Stausboll said that in talking to employees, Mr. Dear liked to sprinkle in famous quotes; one of his favorites was, “Keep calm and carry on.”
Teresa Chavarria, Mr. Dear's assistant, said Mr. Dear would often cite Gen. George S. Patton in conversations, including his quote: “If you tell people where to go, but not how to get there, you'll be amazed at the results.”
Ms. Chavarria said Mr. Dear was a consensus builder among the investment staff. She said he might have had an opinion as to how things should be done, but he let staff come to their own conclusions.
She said his style helped people build confidence in their abilities.
Ms. Chavarria said Mr. Dear was a private person, but he was always inquiring about other employees' children and would share news about his adult children, Annie, 22, and Ben, 25.
In December 2012, Mr. Dear married Anne Sheehan, director of corporate governance at the California State Teachers' Retirement System. It was his second marriage. John Burbank, a close friend of Mr. Dear, said both wanted to keep the wedding low key because of their high-profile jobs.
Mr. Burbank, executive director of the Economic Opportunity Institute in Seattle, said Mr. Dear believed government could help people, and viewed his position at CalPERS as furthering that view by ensuring the financial stability of a pension plan that provided economic security for state and local workers.
Mr. Dear had a long career working in federal and state government before coming to CalPERS. Immediately before, he was CEO of the Washington State Investment Board, Olympia.
He had also served as chief of staff in the late 1990s for Gary Locke when Mr. Locke was governor of Washington, and was assistant secretary of labor at the Occupational Safety and Health Administration in the mid-1990s. Mr. Dear remained active at Evergreen State College in Olympia, Wash., his alma mater, including a stint as a board member for the college's foundation and another as head of the foundation investment committee.
Diplomacy skills helped
His diplomacy skills helped defuse a situation in 2007 when angry students demanded that the foundation divest its oil and gas holdings in favor of alternative energy companies, said Lee Hoemann, vice-president of the foundation. She said Mr. Dear talked to about 30 students and explained, for example, that hydropower, an investment being advocated by the students, caused damage to waterways fished by native tribes.
At the end of the discussion, many of the students realized that socially responsible investing was not as easy as they thought, she said. “It opened up a light for the students,” she said.
George Roberts, a KKR & Co. LP co-founder who knew Mr. Dear for more than 25 years, said what struck everyone was that Mr. Dear was a “nice guy.”
Mr. Roberts said Mr. Dear enjoyed restructuring the investment office at CalPERS. “He liked things that were messy,” he said.
At OSHA, Mr. Dear also was in the national spotlight. Former U.S. Labor Secretary Robert Reich, now a public policy professor at the University of California at Berkeley, said Mr. Dear did better than Mr. Reich thought was possible at OSHA, building a bridge between management and labor on key issues.
“He brought people together, rather than pulling them part,” he said in an interview.
Mr. Reich also said Mr. Dear was not afraid of being aggressive when it was needed. He said they worked together in levying a $7.5 million fine in 2004 against what was then Bridgestone-Firestone (now Bridgestone Co.) for worker safety violations that led to a death and injuries. “He knew when to act boldly and be a tough cop,” Mr. Reich said.
He said Mr. Dear did not get discouraged when things didn't work out, such as efforts to improve ergonomics and work standards for computer users, defeated by intense lobbying from the business community.
Mr. Reich said Mr. Dear continued on new initiatives in other areas without looking back at the defeat.
“He did not dwell on negatives,” Mr. Reich said.
This article originally appeared in the March 3, 2014 print issue as, "'He brought people together'".