GE’s transformer: Face to Face with former GE Asset CEO John Myers
Skip to main content
pilogo-NEW
Subscribe
  • Subscribe
  • My Account
  • login
  • NEWS
    • Asset owners and the coronavirus
    • Alternatives
    • Consultants
    • Coronavirus
    • Defined Contribution
    • ESG
    • Frontlines
    • Hedge Funds
    • Investing / Portfolio Strategies
    • Money Management
    • Pension Funds
    • People Moves
    • Private Equity
    • Real Estate
    • Searches & Hires News
    • SECURE Act
    • Special Reports
    • WorldPensionSummit
    • Ron Schmitz
      Pandemic drives faster transition for Virginia to private markets
      Mubadala Investment Co. logo
      Mubadala draws on portfolio in coronavirus fight
      T.J. Carlson
      Texas Muni reduces downside risk during pandemic, finding opportunities now
      Scott Davis
      ‘Triage plan’ at Indiana system helped stem losses
    • BentallGreenOak agrees to acquire Metropolitan Real Estate Equity
      watch video
      0:45
      Private funds weathered 2020 turmoil
      Daniel McHugh
      Aviva Investors promotes from within for real assets CIO
      Marc Rowan
      More alts managers seek expansion to retail market
    • Kieran Mistry
      Hymans Robertson picks head for new non-traditional risk transfer unit
      Troy Saharic
      NEPC brings on director of new business development
      Bill Foley
      Foley-backed SPAC agrees to $7.3 billion deal with Alight
      Jason Schwarz, chief operating officer of Wilshire,
      New owners have big plans for future of Wilshire
    • Multiemployer pension measures cleared for relief bill vote
      The Charging Bull statue is covered in snow near the New York Stock Exchange on Feb. 11, 2021
      Bain: Private equity managers finish 2020 strong
      Eastern Colorado VA Receives Shipments Of Covid-19 Vaccines
      Fidelity looks to speed vaccinations to get workers back to offices
      OMERS CEO Blake Hutcheson
      OMERS records worst loss since 2008 on bad COVID-19 bets
    • DCALTA releases daily valuation tool for alts in DC plans
      PSCA: Employee participation in non-qualified deferred comp plans rising
      Profile of backlit woman against at TV monitor with female symbols on it
      Women outperform men in managing DC plans – Morningstar
      A  Malaysia flag flies in Putrajaya on Sept. 23, 2020
      Malaysia’s EPF ends 2020 up 7.9% at almost $250 billion
    • TPT Retirement taps into low-carbon strategies
      Gary Gensler
      Nominee Gensler backs SEC climate risk disclosure
      Emissions from a smokestack in Poland
      Asset managers facing more scrutiny on ESG issues – report
      Boris Johnson, U.K. prime minister, hosts the U.N. Security Council's virtual meeting on climate change risks in London on Feb. 23, 2021
      Progress in fighting climate change falls short – U.N.
    • Donation illustration
      Jefferies will use trading commissions to do good
      Michael Arougheti
      SPACs ride wave as latest investment darling
      Spirit winners
      Prudential honors young people who are helping out
      2 U.K. pension execs take on ESG investing in new podcast
    • Robert 'Rob' Shafir listens during a Senate Permanent Subcommittee on Investigations hearing in Washington on Feb. 26, 2014
      Sculptor hedge fund hits sixth straight year of outflows
      The WallStreetBets forum on the Reddit Inc. website on a laptop computer and the GameStop logo on a smartphone in an arranged photo.
      GameStop frenzy has hedge fund managers rethinking next moves
      Gabe Plotkin, chief investment officer and portfolio manager of Melvin Capital Management, speaks during the Sohn Investment Conference in New York on May 6, 2019
      Citadel, Point72 back Melvin with $2.75 billion after losses
      Shanghai skyline
      Global hedge funds struggle even in a more open China market
    • University of West Florida Foundation assigns $5 million to private credit
      Pontiac General Employees drives $5 million into real estate
      TPT Retirement taps into low-carbon strategies
      Gary Gensler
      Nominee Gensler backs SEC climate risk disclosure
    • Fidelity registers 17.9% rise in AUA in 2020
      Mellody Hobson
      Ariel’s Mellody Hobson hitting her stride as co-CEO
      Adrian Lee & Partners appoints head of sales and marketing
      Jackson Square Partners out as Vanguard subviser
    • Funded status of largest U.S. pension plans climbs in 2020
      Corporate plan funding ratios get a boost in February – 2 reports
      Silentnight owners settle pension fund dispute with regulator
      A  copy of the Daily Mirror newspaper is removed from the production line at Trinity Mirror's factory in Watford, U.K., on April 13, 2010
      Media group Reach inks buy-in deal for pension fund
    • Adrian Lee & Partners appoints head of sales and marketing
      BlackRock Investment Institute picks global chief investment strategist
      Metlife Investment Management selects new head of real estate equity
      Eric Lane departs Goldman for Tiger Global
    • The Charging Bull statue is covered in snow near the New York Stock Exchange on Feb. 11, 2021
      Bain: Private equity managers finish 2020 strong
      Carlyle secures $4.1 billion ESG-related credit facility
      Hamilton Lane raises $3.9 billion for fifth secondary fund
      PSG closes first Europe-focused fund at $1.5 billion
    • AEW chooses head of fund operations and debt finance
      Sebastiano Ferrante and Jocelyn de Verdelon
      PGIM Real Estate turns to staff to fill new roles
      European managers key in on specialist strategies
      Ingrid Jacobs
      Jones Lang LaSalle brings on head of diversity and inclusion
    • Neal and Brady
      Retirement security could be only issue both sides accept
      Retirement cartoon
      Hopes rising for retirement readiness in 2021
      Shawn O'Brien
      Annuities coming to target-date funds, but not right away
      David Ireland
      Sponsors returning to questions about in-plan annuities
    • Charging Bull, sometimes referred to as the Wall Street Bull or the Bowling Green Bull, a bronze sculpture that stands on Broadway just north of Bowling Green in the Financial District of New York City
      Top-performing managers Q4 2020
      P&I 1,000 largest retirement plans: 2021
      Retirement in emerging markets
      Outlook 2021
    • U.S. still a key market for investors
      Collected coverage of P&I's 2020 WorldPensionSummit
      Pedestrians pass a large advertisement on the Arndale Center shopping mall reading 'Act now to avoid a local lockdown' in Manchester, England
      COVID-19 puts new opportunities and risks on the agenda - WPS panelists
      Screens display stock price information over the trading floor of the NYSE Euronext exchange in Paris
      Private assets will continue to grow in portfolios – WPS panelists
  • Data
    • Research Center
    • Searches & Hires Database
    • Searches & Hires News
    • RFPs
    • Charts / Infographics
    • Sponsored Research
    • Trackers
    • Q2 2020 searches and hires overview report
      Q2 2020 money manager M&A activity summary
      Q2 2020 legal overview report
      Q1 2020 searches and hires overview report
    • University of West Florida Foundation assigns $5 million to private credit
      Pontiac General Employees drives $5 million into real estate
      Minnesota taps Albourne as first private markets consultant
      LGPS Central seeks managers for targeted return strategy
    • University of West Florida Foundation assigns $5 million to private credit
      Pontiac General Employees drives $5 million into real estate
      Minnesota taps Albourne as first private markets consultant
      LGPS Central seeks managers for targeted return strategy
    • Financial Auditing Services
      Actuarial Services
      Emerging Market Equity Manager Services
      Securitized Credit Manager Search
    • Taiwan Semiconductor’s No. 1 in the emerging markets book
      U.S. fixed-income returns post another positive year
      Nasdaq delivers an impressive year
      U.S. dollar's recent decline continues
    • Institutional Investors: Shared Expectations, Divergent Paths
      Global Investor Study 2016
      Workplace Financial Wellness
    • U.S. Endowment Returns Tracker
      Pension Fund Returns Tracker
      Earnings Tracker
      Corporate Pension Contribution Tracker
  • Insights
    • Opinion
    • White Papers
    • Industry Voices
    • Letters to the Editor
    • Partner Content
    • Publisher's Update
    • Tesla cartoon
      Don’t confuse wealth creation with retirement saving
      Top 1000 cartoon
      Top 1,000 retirement plans weather storm just fine
      Infrastructure cartoon
      You must go big on infrastructure, Mr. President
      Retirement cartoon
      Hopes rising for retirement readiness in 2021
    • Investment Trends: Looking Ahead Across Equity Sectors
      Rethinking Market and Reference Data Management
      China is embarking on a new stage of growth
      Gold Outlook 2021
    • Sameer Shalaby
      Commentary: Why should investors care about treasury management?
      David Blitzstein
      Commentary: Without a national retirement policy, Americans face a future of pension crises
      Lawrence Cunningham
      Commentary: Gensler should keep Clayton’s pragmatic proxy adviser rules
      My-Linh Ngo
      Commentary: Pension funds and the role of the debt market in the fight against climate change
    • Writer using a typewriter
      OCIO industry needs to adopt GIPS
      Writer or journalist workplace. stock illustration
      Even as it assails China, Trump administration emulates it
      Skeptical of Main Street support for proxy adviser proposal
      Focus on manager diversity pushes asset owners’ to walk the talk
    • P&I Content Solutions
      How will gold react?
      To people shaking hands
      P&I Content Solutions
      Lessons From 2020: Today’s OCIO Model Passes a Major Test of Governance
      Sponsored Content By MassMutual
      Leveraging Data to Manage Risk
      Sponsored Content By iShares
      ETFs are becoming a cornerstone of insurance equity portfolios
    • Help us help you by supporting quality journalism
      You Must Believe in Spring
      Everything Must Change
      Tomatoes & Investments
  • Multimedia
    • Videos
    • Webinars
    • Polls
    • Slideshows
    • Charts / Infographics
    • watch video
      0:45
      Private funds weathered 2020 turmoil
      watch video
      0:59
      Secure choice and other retirement plans at a state level
      watch video
      3:33
      P&I 1,000 by the numbers 2021
      watch video
      1:33
      A look at hiring activity in 2020
    • Emerging Markets: Expanding Investors’ View
      2021: A Fixed Income Odyssey
      Technology is the New Oil: The Changing Nature of Emerging Markets
      Powering the Change: The power of diversity and inclusion
    • POLL: Working after the pandemic
      POLL: The year ahead for the 1,000 largest U.S. retirement funds
      POLL: The Biden administration’s economic plans
      POLL: Retirement issues in 2021
    • view gallery
      9 photos
      Coronavirus and the markets
      view gallery
      22 photos
      The 1,000 largest retirement funds: 2020
      view gallery
      10 photos
      Outlook 2020
      view gallery
      10 photos
      2019 as seen through the eyes of Roger
    • By the Numbers for February 2021
      Top performing managers by category: commingled accounts, 4th Quarter 2020
      Top Performing Managers of Domestic Blend Equity, 4th Quarter 2020
      Top Performing Managers of Domestic Intermediate-Duration Fixed Income, 4th Quarter 2020
  • Events
    • Conferences
    • Webinars
    • Defined Contribution Spring Virtual Series
      DC Investment Lineup Virtual Series
      ESG Investing Virtual Series
      Private Markets Virtual Series
    • Emerging Markets: Expanding Investors’ View
      2021: A Fixed Income Odyssey
      Technology is the New Oil: The Changing Nature of Emerging Markets
      Powering the Change: The power of diversity and inclusion
  • Careers
  • Research Center
MENU
Breadcrumb
  1. Home
  2. Print
July 24, 2006 01:00 AM

GE’s transformer: Face to Face with former GE Asset CEO John Myers

John Myers, recently retired president and CEO of GE Asset Management, looks back at the transformation of General Electric's corporate pension office into an institutional money manager.

Mark Bruno
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    John Myers

    • Current position: Retired president and CEO, GE Asset Management, Stamford, Conn.
    • Assets under management: $192 billion
    • Total employees: 470
    • Education: BS in Mathematics from Wagner College.
    • Personal: Married, three daughters, one son. Enjoys basketball, tennis, golf and attending sports events.
    • Retirement plans: Remain on the Boards of Directors for Hilton and Pebble Beach and be actively involved with private equity and real estate.
    • Performance data:
    •  GE Core International Equity strategy
      • One-year return: 32.25%  MSCI EAFE: 24.41%
      • Three-year return: 34.14%  MSCI EAFE: 31.13%
    •  GE High Yield strategy
      • One-year return: 9.12%  Lehman Bros. High Yield: 7.43%
      • Three-year return: 11.71%  Lehman Bros. High Yield: 12.08%
    •  GE China Equity strategy
      • One-year return: 52.13%  MSCI China Free: 45.93%
      • Three-year return: 45.47%  MSCI China Free: 41.43%

    John Myers, the former president and CEO of GE Asset Management who had worked for General Electric Co. since he completed a stint in the U.S. Navy during the Vietnam War, helped turn a corporate pension office into one of the largest institutional money managers in the world.

    Twenty years and $192 billion in assets under management later after first taking on the CIO role, he's moving on to the next phase of his life. He officially retired from GE Asset at the beginning of this month.

    Mr. Myers took over as GE Asset Management's CIO in 1985 — "When I finally found out what I wanted to be when I grew up at the age of 40" — and he never looked back.

    GE Asset Management, which took on its first external clients in 1988, now runs more than $72 billion in external assets for clients around the world. That's in addition to managing General Electric's $53 billion defined benefit plan (to which the company hasn't had to make a contribution since 1987, despite paying out more than $2.5 billion a year). It also runs $54 billion in GE Insurance and $14 billion in proprietary GE employee mutual funds.

    What prompted you to turn GE's pension operations into an external money manager? Our group reports directly to the CEO. We always viewed it as an operating business. But in the mid-1980s … we saw that our work force was aging. At the time, it was 1.5 active employees per every retiree; we could see … that there were going to be more retirees than employees at some point. The pension was for the U.S. (employees only), and our employee base was growing internationally. We concluded that we were not going to grow assets as much as we would like to keep this organization vibrant and exciting. Without growth, you're not going to attract very good people. We felt we could take the GE model (of managing pension assets) and export that — that was the genesis. ...

    What enabled you to actually execute this model? Our culture … wasn't looking into the past. That helped us, because in the money management industry people look backwards too much. … It's difficult to sell something new or to be a contrarian. But you have to take risks and you have to think different. From an investment perspective, our pension fund was the first to ever invest in real estate; we were one of the first to start investing in private equity and international equity.

    What development in the overall investment world do you think has been most significant? Asset allocation is far more understood and much more of a disciplined process than it was 20 years ago. Pension funds, in their infancy, were managed by trust departments. They were predominantly invested in bonds. You have a long-term liability, so the idea was to use an asset that you could closely approximate cash flows, and then invest in it. Then in the '70s and '80s, equities came in vogue. People realized that for long-term liabilities, equities were the best asset; it's going to outperform bonds over the long run. Bonds are not always a perfect match for liabilities. …

    The liability depends on life expectancy, which was increasing at the time, and the salary of the employee. You have to make a lot of assumptions and bonds were not necessarily the best investment for this.

    What about the liability-led investing and liability matching theories now? I think it's the dumbest idea I have ever heard. I just believe that a diversified, balanced, equity-biased, long-term strategic asset mix is the best way to fund liabilities long-term.

    I think what's happened now is that a lot of academics and actuaries have come up with these theoretical ideas of liability matching and they are going back 50 years. You want to be moving forward.

    Our pension fund system in the U.S., if you take out the airlines and autos, is in pretty good shape. Now that interest rates are approaching normal levels again, all of a sudden those liabilities are lower. Here you had Wall Street trying to create this panic over the last couple of years that you've got to immunize your liabilities at historic levels of interest rates. Now people who bought those at 4% interest rates are pretty sorry. We had just gone through the worst three years in the financial markets since the 1930s in 2000-2002. In 2003 the Wall Street community is saying, "We need to change the investment model," because they are looking strictly at what happened over the three years prior. I think it is doing a disservice to the long-term future of the defined benefit plan.

    So what's the risk of moving to such an investment model? I think there is a risk that it could ruin the DB business model. As pension reform and accounting is being discussed, a lot of companies are saying DB plans don't work under new rules. This is going to hurt the country and the economy over the long term if it continues because all it is going to do is take the burden away from a funded DB model, which has been proven to generate higher returns, and throw it on the backs of some other less-efficient models, or throw it on the backs of the government, which is then going to come back to the taxpayers.

    The problems of the airlines and the autos couldn't be solved by any model. Warren Buffett couldn't come up with an investment model that would deliver the promises made by many of the airlines and autos. They were overpromised and didn't face the reality of what could be delivered. Now the investment models are being challenged when it was never the investment models that were the problem.

    What about the move to DC from DB? Have companies made a mistake? I don't think it's necessarily a mistake for the company. I think it's a mistake for the employee. My belief is that a retirement plan should have three legs — defined benefit, defined contribution and Social Security. A normal GE employee is now retiring at close to 100% of their last year's pay with a combination of those three factors. I don't know why other companies can't have the same model if they have the patience and discipline to do it.

    Why didn't other companies follow your approach? I think we were a first-mover in a lot of areas that weren't necessarily great performers at first. … We started hedge funds in 1991. Actually, the years we invested in hedge funds, they weren't outperforming the S&P 500 but they were giving us the good, solid mid-teen returns that we were looking for. But when the markets turned downward in 2000-2002, that's when they really came into play. And we didn't get into it for downside protection necessarily, we got into it because it was a diversified play and it was more absolute-return driven than relative-return driven.

    What do you think of the shift to DC? Defined contribution has its benefits — it's portable and they (participants) can invest in whatever asset classes they like. But the returns have been substantially lower than DB for two reasons: the fees are much higher; and DB plans are run by 24/7 investment professionals. DC plans are selected by individuals whose primary job isn't in the investment business. Hopefully that will evolve and companies will guide and assist employees more.

    If you could do one thing over, what would it be? I would have built out the fixed-income research earlier. In 1990, we really didn't have our own internal research groups. We had a couple of portfolio managers in equity and fixed income. We built our own internal capabilities over the last 13 years — 25 analysts on fixed income, built out both U.S. and international research capabilities, and then private equity and real estate. This made us less reliant on Wall Street.

    Recommended for You
    Read the print edition of P&I
    Read the print edition of P&I
    How low is low? Projections say it's not low enough
    How low is low? Projections say it's not low enough
    Citadel's Ken Griffin gives $125 million to Chicago museum; name will change
    Citadel's Ken Griffin gives $125 million to Chicago museum; name will change
    Lessons From 2020: Today’s OCIO Model Passes a Major Test of Governance
    Sponsored Content: Lessons From 2020: Today’s OCIO Model Passes a Major Test of Governance
    sponsored
    Events
     
     
    Sponsored
    White Papers
    Rethinking Market and Reference Data Management
    Investment Trends: Looking Ahead Across Equity Sectors
    China is embarking on a new stage of growth
    Gold Outlook 2021
    Shifting DC Times - Winter 2021
    GP-LED OPPORTUNITIES AT THE SMALLER END OF THE MARKET
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    pilogo-NEW
    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    150 N. Michigan Ave.
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • NEWS
      • Asset owners and the coronavirus
      • Alternatives
      • Consultants
      • Coronavirus
      • Defined Contribution
      • ESG
      • Frontlines
      • Hedge Funds
      • Investing / Portfolio Strategies
      • Money Management
      • Pension Funds
      • People Moves
      • Private Equity
      • Real Estate
      • Searches & Hires News
      • SECURE Act
      • Special Reports
      • WorldPensionSummit
    • Data
      • Research Center
      • Searches & Hires Database
      • Searches & Hires News
      • RFPs
      • Charts / Infographics
      • Sponsored Research
      • Trackers
    • Insights
      • Opinion
      • White Papers
      • Industry Voices
      • Letters to the Editor
      • Partner Content
      • Publisher's Update
    • Multimedia
      • Videos
      • Webinars
      • Polls
      • Slideshows
      • Charts / Infographics
    • Events
      • Conferences
      • Webinars
    • Careers
    • Research Center