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Pension Funds

Life post-CalPERS: CIO Eliopoulos envisions private-sector career

Theodore "Ted" Eliopoulos, chief investment officer of the $355.9 billion California Public Employees' Retirement System, sent shock waves through the investment industry with Monday's announcement that he would be leaving the pension system at year-end for family reasons. Two days later, he detonated a bomb with the announcement that CalPERS is developing plans to create a separate corporation to make direct private equity investments.

Mr. Eliopoulos took some time to speak with Pensions & Investments about his next steps and the search for his replacement. Questions and answers have been edited for length and clarity.

Q. What's next for you?

A. I am really, really focused on this transition right now ... to make sure in the next seven months there is a very smooth transition for CalPERS. I want to make sure we spend the right amount of time to find the next CIO. I've developed so much of my professional career at CalPERS, I want to make sure everything goes well. That's first, second and third.

Q. Will you be taking time off after you leave CalPERS?

A. It's quite a long transition period, for sure. I wouldn't expect that (to take time off). Looking forward, I'll likely move into the private sector for a career.

Q. What are qualities needed for the next CIO at CalPERS?

A. (CalPERS needs) an individual with very strong and experienced investment skills, a person of high ethical and moral character, with very good judgment about people and programs. In addition to that, it's a position that's in the public arena, so strong and good and effective communications skills are a good skill set as well … (CalPERS CEO Marcie Frost) will have qualities she will be looking for and I have every confidence she will be making the right choice.

Q. You're passing off quite a big project to your successor, with the plans for a separate private equity corporation. That isn't expected to launch until the first half of 2019, correct?

A. It's never a good time. This is a very, very long-term project. We have been working on it for a year now, almost two years. This phase will have another year to it. If approved, it will have a 40- to 50-year lifetime. It will also need the leadership of all of CalPERS and it will see a succession of CIOs through its lifetime. What's important is this is a collaborative approach from our entire organization. My hope is when and if these vehicles are brought forward for approval, they will have widespread support (throughout the organization).