SACRAMENTO, Calif. -- Nancy Everett, Christopher Ailman and Patrick Mitchell -- Sheryl Pressler's counterparts at the Virginia, Washington and California Teachers' pension funds, respectively -- are among the top candidates to replace Ms. Pressler as CIO of the California Public Employees' Retirement System, headhunters and insiders say.
Bob L. Boldt, CalPERS' senior investment officer for global public markets, also is a strong contender for the nation's highest-profile pension fund position. Mr. Boldt is responsible for all of the $168 billion system's public market investments, or 93% of assets.
Also mentioned was Collette Chilton, now chief investment officer at Lucent Technologies Inc., Murray Hill, N.J., who had been CIO at the Massachusetts Pension Reserves Investment Management Board, Boston.
Ms. Pressler will be leaving CalPERS Feb. 29 to become chief executive officer of Lend Lease Real Estate Investments Inc., Atlanta.
Ms. Chilton and Mr. Mitchell declined to comment. Ms. Everett did not return calls. Mr. Ailman said he would have to consider applying for the CalPERS post, given the fund's reputation as an innovator. Mr. Boldt said he has been encouraged to apply for the post and will do so.
The CalPERS staff plans to hire an executive search firm to conduct a national search for a new CIO. Spokeswoman Pat Macht said there is no timetable yet, but the system hopes to hire a new CIO in three to six months.
One executive close to the fund said Mr. Boldt would be perfect for the job because he has a strong background in money management, having worked as a senior vice president at Fisher Investments, Woodside, and as a portfolio manager at New York-based Scudder & Stevens & Clark.
"In addition, he is bright, personable and committed to corporate governance. He has been positioned for the job" by Ms. Pressler, who hired him, the executive said.
Board members believe the job is too important to hire from within without conducting a search, he said.
What worries many executives at the highest levels of CalPERS, however, is that the search process is going to be politicized, and the best candidate will not necessarily get the job.
Not an easy search
Other contenders for the post could be money managers or the No. 2 or No. 3 person at a corporate pension fund, said Michael Castine, a managing director at executive recruiter TMP Worldwide Inc., New York. Others said that endowment or foundation executives would be considered.
"It won't be an easy search, because it doesn't pay like the private sector," he said. With a maximum incentive award of 75% of her base pay, Ms. Pressler earned $339,122 in fiscal year 1998, with $120,827 of that an incentive award. Her base salary for 1999-2000 was $240,125. The board has not decided whether to pay her a partial incentive award.
"But it's very prestigious and clearly a resume builder. Many people would want it for that reason," Mr. Castine said.
Richard Lannamann, managing director at executive recruiters Russell Reynolds Associates Inc., New York, agreed. "It's sort of like playing for the Yankees. It's the biggest, most visible, most powerful public pension fund job in the country."
But internal politics is the biggest deterrent from taking the job for some. Several other public fund CIOs, who spoke off the record, said they already deal with enough politics in their current jobs and have no wish to take on the CalPERS position.
Time to move on
Most observers were not surprised by Ms. Pressler's decision to leave CalPERS, since all her plans had been implemented. It was the time to make a move, said one observer.
Richard Koppes, who was chief general counsel to CalPERS for 10 years, helped recruit Ms. Pressler from McDonnell Douglas Corp., St. Louis, where she ran the pension fund. He recalled that she had promised the CalPERS board in 1994 that she would stay at least five years, and she stayed six instead.
"This is a wonderful opportunity for Sheryl," Mr. Koppes said. "She was terrific for CalPERS. She was always up for the fight and was never afraid to say what she thought."
Among her biggest accomplishments, according to Mr. Koppes, was to boost CalPERS' equity allocation. In 1995, the board increased stock investments to 63% of total assets from 49% at Ms. Pressler's behest. "She convinced the trustees to do that after she had them study the liabilities 20 and 30 years out," he recalled.
She also pushed the fund to index more of its assets.
Her other major accomplishment was professionalizing the staff, Mr. Koppes said. She got the system to upgrade the staff and pay on an incentive basis.
At Lend Lease, primarily a real estate operation, Ms. Pressler said she will lead the firm's expansion into other areas of financial services.
Ms. Pressler was hired to help bring Lend Lease's U.S. operations to the "next level," said Marty Nass, the senior partner at TMP Worldwide Inc., who ran the search for the CEO job.
Although not known as a real estate executive, Ms. Pressler led the restructuring of CalPERS' $8 billion real estate portfolio and built a team to run it. Before she had a team in place, she ran the system's real estate and private equity portfolios on a day-to-day basis.