Asset owners hire executives at fast pace, with focus on diversity

The changing of the guard among senior asset owner executives is fast-paced so far this year, with a sharp focus on hiring more women and people of color.

Pensions & Investments' reporting through Sept. 30 covered senior-level hires (CEO, executive director or chief investment officer) or open positions for 23 institutional investors so far this year. Four of these asset owners have yet to hire a permanent replacement for CIOs and CEOs, including the $487.7 billion California Public Employees Retirement System, Sacramento.

Senior-level departures that P&I analyzed included nine retirements among asset owners. The rest of the newly hired senior executives were replacements for people who left for other reasons. Two new appointees replaced an executive who died.

Among the new CEOs and CIOs of large institutional investors are:

• Cassandra Lichnock was promoted to CEO of the $318.4 billion California State Teachers' Retirement System, West Sacramento, on July 1, replacing Jack Ehnes, who retired. Ms. Lichnock was the system's chief operating officer.
• Allyson Tucker will take over as CEO of the Washington State Investment Board, Olympia, on Jan. 1. She will replace Theresa Whitmarsh, who is retiring on Dec. 31. Ms. Tucker is CIO of the board, which managed a total of $181 billion, of which $142.5 billion was in defined benefit plan assets, as of June 30.
• Edwin Denson was promoted in April to executive director and CIO of the State of Wisconsin Investment Board, Madison, replacing David Villa, who died Feb. 13. Mr. Denson was managing director, asset and risk allocation for the board, which as of July 31 managed a total of $157.9 billion, including the $140.2 billion Wisconsin Retirement System.

In all, eight of the public pension funds P&I tracked promoted from within to fill CEO/executive director and CIO vacancies, a fairly common practice by boards of trustees, said Randall W. Miller, chief operating officer of pension fund governance specialist Funston Advisory Services LLC, Bloomfield, Mich.

Over the past five years, boards have adopted succession plans for senior employees, which "tend to focus on 'what do we have in house' given that there has been more focus on training and developing the skill sets of lower-level employees so they can move up to fill open spots," Mr. Miller said.

Some of the new hires by asset owners, especially for senior investment staff, are about upgrading their investment team with a new CIO given the "desire by boards for differentiated absolute and relative performance," said David Barrett, managing partner at executive recruitment firm David Barrett Partners LLC, New York, in an email.

Many asset owners increasingly are searching for more diversity in their ranks at all levels, but particularly at senior levels, sources said.

"The pace of hires among asset owners is strong and there's a sharp focus on hiring minority CIOs, which is difficult given that there's not a large pool of buyside CIO black talent," said recruiter Charles A. Skorina, managing partner of Tucson, Ariz.-based Charles A. Skorina & Co.

Review of the 19 hires of CEOs/executive directors and chief investment officers by institutional investors reported by P&I found that 11 were women, people of color or both.

Edward "Ted" Wright, who is Black, was appointed CIO of the Hartford-based Connecticut Retirement Plans & Trust Funds effective Aug. 23, replacing Laurie Martin, who left in January.

Mr. Wright advises state Treasurer Shawn T. Wooden on investments and manages day-to-day investment operations for the division's assets, which totaled $41.7 billion as of July 31.

He previously was principal investment officer and head of global equity at Los Angeles County Employees Retirement Association, Pasadena, Calif., which had $73.7 billion as of June 30.

Two Black Illinois-based senior pension executives moved to new pension funds in the state over the summer:

Angela Miller-May was appointed CIO of the $53.1 billion Illinois Municipal Retirement Fund, Oak Brook, on Aug. 16. She replaced Dhvani Shah, who left the fund in December 2020 for a job as CIO of a private company, JM Family Enterprises Inc., Deerfield Beach, Fla. Ms. Miller-May previously was CIO of Chicago Public School Teachers' Pension and Retirement Fund.

Carlton W. Lenoir Sr. joined the $13.1 billion Chicago teacher's fund as executive director on Aug. 2. He replaced Jeffery Blackwell, who was interim executive director and remains president of the board of trustees.

Mr. Lenoir also was named interim CIO of the teachers' fund on Sept. 27 after the previous interim CIO, Andrew K. Kelsen, resigned on Sept. 24.

A national search will be conducted to permanently replace Ms. Miller-May at the teachers' fund, a news release said.

Mr. Lenoir previously was chief benefits officer at the $64.5 billion Teacher Retirement System of Illinois, Springfield.

While some asset owner CEOs and CIOs have been ready to move to new funds, sources said money managers in these positions don't have a strong incentive to change jobs right now.

"Markets are strong, performance is solid and assets under management are up, resulting in higher revenue so (2021) bonuses will be good" for senior money manager executives, said Catherine A. Seifert, vice president and equity analyst at CFRA Research Inc., New York.

In some cases, board politics, a lack of suitable candidates, or intense competition for minority and/or female candidates slow down the recruitment process.

CalPERS' CEO Marcie Frost and executive search firm, Dore Partnership Inc., New York, for example, do not expect to have a new CIO in place until spring, according to comments made during a July 14 board meeting. .

CalPERS has been working on and off to find a new CIO after the fund's former CIO, Yu "Ben" Meng, resigned on Aug. 5, 2020, after questions arose about his stock holdings.

Dan Bienvenue, who is deputy CIO for total portfolio strategy, was appointed interim CIO on the same date.

CalPERS called off the CIO search in March without making an offer to three candidates and resumed the search in July.

During the July 14 board meeting, some board members said there were very few diverse CIOs.

Only 10 of the CIOs of the 100 pension plans, endowments, foundations and sovereign wealth funds in Dore's dataset are female and just four are from historically underrepresented groups, trustees learned during the recruiters' presentation.