“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.