Debra Smith was named CalSTRS' first chief operating investment officer, part of a plan to increase the amount of assets managed internally to 60% from 45%.
The announcements were made at the CalSTRS investment committee meeting on Friday.
The system also hired two asset class directors. Glenn Hosokawa was named director of the $22.4 fixed-income asset class while Paul Shantic was named director of the $1.4 billion inflation-sensitive asset class, a new position.
Messrs. Hosokawa and Shantic were previous co-directors of fixed income.
“These three appointments, coupled with our 2010 creation of a deputy chief investment officer, completes a new organizational structure that allows us to bring more assets in-house,” CalSTRS CIO Christopher J. Ailman said in a statement. “This structure matches what you find in most large investment money managers. This also fits our plans to internally manage more of our assets — currently at 45% in-house — to a projected 60% internally managed.”
There is no specific timeline for getting up to the 60% internally managed asset goal, said Ricardo Duran, a spokesman for the system, in an email.
Mr. Ailman said the new structure has Ms. Smith overseeing investment operations and a new unit comprised of compliance, internal controls, ethics and business continuity. He said Ms. Smith will also directly report to the investment committee twice per year.
“This fulfills a goal of CalSTRS' internal auditors, who recommended the separation between investment management and investment operation,” he said.
Ms. Smith already works for the $186.4 billion California State Teachers' Retirement System, West Sacramento; she has risen through the ranks at CalSTRS from associate investment officer in 1998 to director of investment operations in 2010.
Mr. Hosokawa is also a long-time CalSTRS employee. He started as an investment officer in 1998, was promoted to portfolio manager in 2005 and in 2012, was named acting co-director of fixed income when then-director Michelle Cunningham was named acting deputy CIO. She was named to the permanent position on June 1.
Mr. Shantic served alongside Mr. Hosokawa as acting co-director of fixed income before being elevated to lead the newly formed inflation-sensitive asset class.
