How a second-grade exchange shaped Minnesota state board CIO Jill Schurtz's outlook on opportunity

There's a story behind that giant yellow pencil propped behind Jill Schurtz’s desk. It was a thank-you gift from the staff of the St. Paul Teachers’ Retirement Fund Association to their outgoing CIO when she left the then-$1.2 billion fund in 2022 to take the reins of the Minnesota State Board of Investment.

The gift was an appropriate send-off: Schurtz recalled that the teachers fund began awarding the pencils to state lawmakers who were particularly committed to advancing policy changes or supporting funding requests.

It helped the teachers stand out against the Minnesota Professional Fire Fighters Association, which bestowed a coveted Golden Axe award.

“I remember telling my board, listen, you’ve got to know, we’re never going compete with those guys. They’ve got the axe!’’ Schurtz said with a laugh.

“We started joking around about what we would do. (Lawmakers) understand teachers, they understand pencils. So as a thank you when we got big legislation passed, we started expressing our gratitude with a pencil." And when a teacher happened to visit a lawmaker's office and saw that giant pencil, they'd know they had an ally, she said.

Her competitive drive has shown up in other ways during her career, including ensuring that investments compete for capital as well as graduating from a top U.S. military academy. This year, she is being recognized as one of P&I's Influential Women in Institutional Investing.

In this second installment of a Face to Face interview with Schurtz, executive director and CIO of the $146 billion Minnesota State Board of Investment, she talks about lessons learned, her career, the importance of hiring and developing a team, and the need for diverse perspectives. Questions and answers have been edited for conciseness and clarity.

Q: In terms of leadership, let’s talk about your background. You’re a West Point graduate and spent seven years in the Army, attaining the rank of captain. What attracted you to West Point?

A: It's that mission. It's that ethos. There is such a living, breathing sense of purpose and it's real and it's embodied. It's embodied everywhere at West Point, from the motto of duty to our country, to the way the leaders act and behave, to the way you're organized from the minute you step on the campus. It's very clear that we are all one for this one mission — and the mission matters. So I think again, if you're somebody that gets animated by that, it's wildly energizing. And that was clear to me from really early on. I think we talked about (me) sitting there in second grade when they showed that presentation, it was clear to me that that place was just something I should aspire to.

Q: And to clarify, that presentation from a local executive who visited your second-grade class in Peoria sparked your interest?

A: Walker Flint. He was a Caterpillar executive, and he was a West Point graduate. He represented Caterpillar, which had their world headquarters in Peoria at the time.

He was tasked to do the all-academies presentation, but for some reason, because I think he was a West Point grad, he did a great job presenting West Point and I came up to him afterwards and said, "Mr. Flint, I'm going to go to West Point. That's where I need to be." And he was magnificent. He very kindly looked at me and said, "I really appreciate that. Thank you. We don't have women at the academy."

I thought that was unfair, but it's the way it was. But I think accidents of time — time was really kind to me because in ‘76, the first class of women showed up. We were the seventh class to graduate. I think I really appreciated the fact that we were close enough to those first classes to see and feel that, but far enough away that the academy had a few rotations. But I think everybody was still trying to figure out what does it mean to have women here.

Q: How did that affect your views on diversity?

A: Well, I think it probably did affect a worldview generally around opportunity. I probably didn't live far away from that second-grader who was told you can't do that. And how unfair that felt. And then just the joy of realizing it is a possibility. I have that opportunity now, so I don't lose sight of that. And then living through the experience in real time, how important it is to make sure that people are on the same page about opportunity. And then I am incredibly lucky. I know what that opportunity gave me through the years, and I don't know, if I hadn't gone to West Point, I don't know if I would've gotten into Columbia Law School, right? If I hadn't gone to Columbia, would I have been at Skadden, Arps and so on. So I think about when hiring people, what does that one opportunity lead to and how important that is.

I'd also say, 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. So thinking of the world through that lens, what do you want that pool to look like? How wide do you want that opportunity to be? And quite frankly, why wouldn't you make it wide?

That's kind of the ethos I've taken with me. Why wouldn't you want the best team on the playing field? And if you don't have a wide aperture to begin with, I don't think you sleep at night knowing you have the best team on the field. I don't think it's about numbers. It's about making sure that if you really believe that what you're doing is so important, and I do, this mission is, we want the widest aperture, the best team on the playing field, and I want diverse opinions. I think we're headed in the right direction.

Q: What are some things that you've done to increase that field of talent?

A: We started with the senior team and really sat down and grounded ourselves on, are we all on the same page? Are we speaking the same language? Because there is an opportunity for misunderstanding when you start talking about this topic. So it was really important to make sure that we were all talking about that language of, we want the best team, we want a wide-open opportunity set and then merit's going to win.

Once we were all aligned on that's what we were trying to achieve, I think it became clear. We started looking at our position descriptions and minimum qualifications, and we realized, unintentionally, inadvertently, a lot of these were written as though it had a single existing person in mind. And so we stripped those down and said, what does it really require to be a starting junior analyst at the Minnesota State Board of Investment, to be a brand new junior analyst? Do you have to have five years of experience and a CFA?

Actually, we don't want that. We want somebody who is intellectually curious, who has some quantitative skills, which is incredibly helpful, who wants to be an investor, who is going to work hard, have integrity and character, and they believe in public service. And if we can find that person, we'll teach them FactSet and all of the other things. We'll grow them here. I think that's a meaningful change because once you do that, now there's a very broad pool of folks that could be an analyst at the Minnesota State Board of Investment.

Q: Does that approach also extend to work with some of your portfolio companies and managers? Are they hiring the best? Are they considering diversity?

A: I think it has to. My focus isn't to drive a numerical outcome, but my focus is to understand who are they as our trusted partner? How do they think about best business practices? How do they think about making sure that they've got the diversity of thought and opinion? In this day and age, if you're not hiring at that sort of entry level, an interesting, diverse mix of people, the best and brightest will probably self-select out of your pool. The best and brightest coming out of schools today, they want to work in a collegial environment with diversity of thoughts and opinions, and we hear that from managers.

So we spend a lot of time talking about how do you source that entry-level class. How are you doing outreach? How are you doing training? How do you make sure that that class is really being trained so that they have an opportunity for promotion? And then how do you track that through your ranks? That's where I think our voice has a role to play."

Q: What do you think about the role of sponsorship and mentorship, from yourself in particular?

A: It's important to set a good example, full stop. I would hope that, for example, when people come in this door to interview that they look around and they understand our ethos, that they're not just hearing it from me, but they're hearing it from all of our team members. I think that's a part of that mentorship and sponsorship. I owe a duty of responsibility to all of our leaders to sponsor them in their careers and to really be focused on our junior analysts and how are they thinking about their career.

Q: Has the asset management industry gotten the message about the need for diversity or the importance of diverse thoughts?

A: I think there's a tendency to look at the numbers and to say, wow, the needle's not moving enough. I've heard that many times. Talking to managers both large and small, I have zero doubt the message is there. When you're talking to the very large, heavily resourced firms, it is very evident that they have invested time, resources and are taking very seriously these questions, these issues.

Some (of the managers) that we've spent a lot of time with, they've even walked us through, we tried this and it was an absolute failure and therefore we've learned and we are rebuilding in this way. I've been generally very impressed by senior management's focus on this. Where it gets harder is the middle-size and the smaller firms, they don't have quite the resources and they don't hire as much.

I think we want to be flexible in our thinking about that. We'd rather be on the playing field, having the conversations with them rather than walking away. If we walk away, we won't drive change. We sit with them and explain why this is so important and that we will be here at this table with you. I think we can drive change.

Q: One of the points that I've heard larger managers make is that when you find great people, that even if you don't have a role for them at that moment, it's good to try to get them into the organization. True?

A: I agree with that. I'm not saying that we all have to be patient. I don't think we necessarily have to be, but I just look at the arc of time and I look at that West Point experience when I was there, which again, I have just a tremendous respect and fondness for that experience.

But I fast forward — 35 years? — and I'm on that investment committee and I go back there for those meetings and I look at that board and I walk the campus. I look at that change. Look at the Rhodes Scholars that have come out that are women, the brigade commanders, now the women officers, the one-star, two-star generals that have come back, the professors that have come back. It's stunning. But that takes time for those female cadets to grow and make that whole cycle and come back. And in just that generation from when I was there to now, it's profound. And that's what we're going to see in the asset management community as well.

The State Board of Investment hasn't turned over this (CIO) position often. And if you look at Howard Bicker, 35, 40 years, then Mansco Perry, and now there's a woman. I think the arc of time is headed in the right direction on these things.

Q: What advice can you share with early career women who are getting started in institutional investing?

A: I think there's this tendency to feel like, well, there's a map and it's a linear map and it's point A through Z, and you've got to hit every one of those points or you're not going to get to your destination. And it's true in asset management, probably many professions, not to be so tied to that linear thinking.

Many great investors and leaders actually have a pretty diverse background. They have allowed themselves to follow different paths, whether it's being at different institutions or different asset classes or even different practice areas. Every stop along the way adds to your body of knowledge and contributes to your career. And you've got to be brave enough to take those detours along your path.