CalSTRS is in the home stretch in its search for a new chief investment officer, just as the MassPRIM board is coming off the starting blocks.
At the California State Teachers' Retirement System, Sacramento, interviews with three finalists for the CIO job at the $113 billion fund are slated for Sept. 6, with a selection to be made shortly thereafter.
Massachusetts Pension Reserves Investment Management Board, Boston, soon will begin its own search for a CIO, following this month's announcement that Carol Casey will leave her post at the $32 billion pension fund effective Sept. 30 for family reasons.
At CalSTRS, Christopher Ailman of the $59 billion Washington State Investment Board, Olympia, and Phil Archibeck, state investment officer for the New Mexico State Permanent Fund, Santa Fe, are front-runners for the job at the nation's third-largest pension fund.
Mr. Ailman declined to comment, although he previously had acknowledged that he had been in the running for the CIO slot at the California Public Employees' Retirement System.
Mr. Archibeck confirmed that he is a candidate for the CalSTRS job. He has been with the $12.5 billion New Mexico fund for 14 years. The fund has achieved top-quartile performance in BARRA RogersCasey's large fund universe over the past 12 years.
Some sources believe Richard Hayes, head of private equities and a senior principal investment officer at the $172 billion CalPERS, made it at least as far as the semifinalist round; semifinalist interviews were held on July 26. Mr. Hayes did not return phone calls seeking comment.
It had been widely believed that Sandra Parker, manager of investments for investment administration at the Getty Museum, Los Angeles, had been under consideration, but an assistant to Ms. Parker denied the rumor. Ms. Parker, who previously had served as assistant chief executive officer-investments at CalSTRS, was not available for comment.
Maureen Alphonse-Charles, a consultant with Whitehead Mann Pendleton James, Boston, which is conducting the searches for both CalSTRS and MassPRIM, declined to discuss any potential candidates.
She explained CalSTRS is seeking a candidate with strong leadership skills and investment knowledge in several asset classes. The individual also must have experience in selecting money managers and working with consultants.
The CalSTRS board also wants its new CIO to have business management experience and communications skills, as well as strong personal characteristics such as a passion for investments, top-flight educational background and a lively intellect, she said.
The base salary for the post ranges from $185,000 to $230,000, with a performance-based bonus of about 27.5%.
The search for a successor to Patrick Mitchell, who recently left the fund for a private-sector job with Metropolitan West Securities Inc., is nowhere near as high-profile as the recent search for a CIO at CalPERS. CalSTRS also is viewed as a far calmer environment.
As of June 30, CalSTRS had 67% of its assets invested in domestic and international stocks. Passive investments accounted for about two-thirds of total assets, down from four-fifths three years ago.
The fund currently is negotiating to hand over $4 billion to $7 billion of a passive international equity mandate to State Street Global Advisors, Boston. The portfolio would be carved out of a similar $13.6 billion portfolio run by Barclays Global Investors, San Francisco.
However, industry sources said SSgA would receive $2.4 billion in an extended-market mandate and $5.2 billion benchmarked to the Morgan Stanley Capital International Europe Australasia Far East index. Also, one-third of a $1.8 billion passive emerging-markets mandate would be transferred to BGI, leaving SSgA with a net $7 billion gain.
The fund also has 24.2% invested in fixed income, 7.9% in private equities and nearly 1% in cash.
The MassPRIM Board hopes to have a new CIO in place by the end of this year, said Scott Henderson, executive director at MassPRIM.
Ms. Casey was hired in July 1999 after a 16-month search following Collette Chilton's departure; she left to became CIO at Lucent Technologies Inc., Murray Hill, N.J.
Mr. Henderson said he doesn't think Ms. Casey's departure will have a major impact on the program. "We have a strong deep staff and a strong board," he said.
Mr. Henderson, who was acting CIO between Ms. Chilton's departure and Ms. Casey's arrival, doesn't anticipate another lengthy search, in part because the state's political climate is more stable than it was two years ago. The last search began in a year when the office of state treasurer, which chairs the PRIM board, was up for election. Current Treasurer Shannon O'Brien won the seat and began her four-year term in January 1999.
In addition, the board for the first time has enlisted the help of an executive search firm. The search that resulted in Ms. Casey's hiring was done in-house.
"Whitehead Mann Pendleton James has some fresh insight into the marketplace," said Mr. Henderson. It also has a database of candidates from the high-profile California searches.
The budgeted salary for the position is $165,000, with an incentive compensation plan based on the fund's performance. The budgeted salary was part of a plan approved by the board three years ago to make MassPRIM more competitive.