New CIO at CalPERS says she is eager to take on role

Incoming CalPERS CIO Nicole Musicco says accepting the top investment job was a challenge too big to ignore.

Now a partner at New York-based private equity shop RedBird Capital Partners LLC, Ms. Musicco succeeds Yu "Ben" Meng, who resigned from the Sacramento-based California Public Employees' Retirement System in August 2020 after questions arose over some of his personal stock holdings.

Ms. Musicco will begin her role at the $479.6 billion pension fund on March 28 and report to CEO Marcie Frost.

The CalPERS CIO position "ties together my career," Ms. Musicco said, giving her the chance to put the skills and capabilities she's accumulated to work with talented individuals.

Ms. Musicco, 47, currently leads RedBird's Toronto office as well as the firm's impact and diversity investment initiatives and businesses development activities in Canada. She has been with RedBird, which has $5 billion in assets under management, since 2020 and was the firm's only female partner.

CalPERS is not an investor with RedBird, although pension fund team members did meet with firm executives in the second half of 2019 when it was raising RedBird Series 2019, a RedBird spokesman said. That fund closed with $2.6 billion in 2021.

In her time at RedBird, firm executives have been sorting out the firm's in-house diversity and inclusion strategies, Ms. Musicco said in an interview.

Firm executives have been thinking about diversity and inclusion through a portfolio management lens, she said.

Before joining RedBird, Ms. Musicco spent a year as senior managing director, head of private markets at the C$73.7 billion ($57.9 billion) Investment Management Corp. of Ontario and spent 16 years with the C$227.7 billion Ontario Teachers' Pension Plan, leading both the private equity and public equity investment teams.

Ontario Teachers helped capitalize RedBird when the firm was founded in 2014 and invested alongside the firm.

Ms. Musicco said that she was hired by Investment Management Corp. of Ontario for her direct investing skills. IMCO already was an investor in private equity, infrastructure with some co-investments, and real estate with a number of direct investments.

"I probably spent the vast majority of my time building teams in private equity, infrastructure and real estate," and making sure the program was up and running with the right systematic approach to direct investments, Ms. Musicco said.

While at Ontario Teachers, Ms. Musicco set up the pension fund's first office in the Asia-Pacific region, remaining in the Hong Kong office for more than a year, helping to build its presence in the region. During her time at Ontario Teachers, she was a director in private equity direct investments, head of private equity funds and co-investments, and in her last two years, head of public equities.

Ms. Musicco said she was "extremely fortunate" to have mentors who recognized her potential and made sure she was continually adding certain skills and capabilities to her toolkit.

"I do love a challenge," Ms. Musicco said. She added that she likes learning from others, viewing investments through a global lens, and increasing diversity and inclusion in the industry.

Her experience helped her win over the board at a time when it is embarking on implementing a new asset allocation.

"I feel like she would be a perfect fit for the positive team environment Marcie (CEO Marcie Frost) created," said Theresa Taylor, president of the CalPERS board.

Ms. Musicco "brings to CalPERS what I consider 'capital I' investment knowledge," said California Controller and CalPERS board member Betty T. Yee, in an email. "She is a strategic investor with a breadth and depth of experience across asset classes, and I look forward to working with her."

And while there was "a tremendous amount of press" around CalPERS' decision to add leverage, Canadian plans including Ontario Teachers typically utilize around 30% or more leverage, she said.

"Frankly, it's a necessity in this environment," Ms. Musicco said. To hit their expected rates of return, investors need to find ways to get return without increasing risk, she added.

RedBird executives support Ms. Musicco's move to CalPERS as its new CIO and "are behind her 100% of the way," said spokesman Dan Gagnier. RedBird has a "deep bench" of investment executives and will be "opportunistic around further additions," Mr. Gagnier said.

In a news release, CalPERS' Ms. Frost said: "Nicole's experience, vision, and skill as an investor in public and private markets is critical for CalPERS. We were determined to take our time to ensure we found the right candidate who could succeed in a high-pressure and demanding environment."