March 31, 2017 – Recruiters specializing in the investment function continue to report that demand for executive level ‘high impact’ investing talent is on the rise. Against that backdrop, DHR International has just been retained by the State of Alaska to lead its search for a new chief investment officer (CIO). Carol Hartman, the search firm’s managing partner of financial services North America, is leading the assignment.
Alaska’s CIO will direct all investment functions for the state as the senior member of its treasury investment team. The chosen leader will evaluate and develop strategies and tactics, and independently provide advice to the fund fiduciaries for all investment matters. The position plans, directs and provides oversight management of internally and externally managed investment portfolios.
The investment officer put into position will have a minimum of 10 years relevant and extensive investment and market expertise, demonstrated by success in managing large, multi-asset class portfolios as a CIO or senior member of a portfolio management team. The leader will bring a sophisticated institutional investment process, philosophy and conviction to the role.
Alaska, or Bust
Ms. Hartman’s search practice focuses on capital markets, asset management, regional and private banking, mortgage, risk/compliance, payments/financial tech and retirement income. She also has worked with private equity, insurance, real estate and startup companies. In another recent search in Alaska, Ms. Hartman recruited the chief investment officer for Alaska Permanent Fund.
Ms. Hartman recently sat down with Hunt Scanlon Media to discuss general sector trends, the assignment for the State of Alaska and the inherent difficulties of recruiting in, and persuading talent to, the 49th state.
Carol, talk about the current state of demand for high impact investment talent.
We see investment officers in high demand across our platform. We have noticed high expertise requirements in the pension and retirement areas from clients like the State of Alaska and the Alaska Permanent Fund, but demand is also high in the family office and endowment spaces. We have also seen growing demand for top drawer CIO leaders. Larger platforms like Northern Trust provide an outsourced CIO function to institutions that lack the expertise or resources to fully staff. Wealth management has a need for some of these experts in certain verticals like fund of funds and manager selection for clients that I call “insti-viduals.” These clients are so significant they have needs and behaviors akin to institutions. Further, our wealth management clients have seen incredible recent growth and are now focused on making sure those advisors stay and newer ones who’ve come on board ramp up to profitability as quickly as possible.
Describe a typical path for an executive to the chief investment officer post.
Mastering the role today are executives who flat out love investing. They have likely been responsible for leading one or more asset classes. Experience with alternatives including PE, VC, and real estate have been common themes. We have noticed a desire for experience with uncorrelated risk with the U.S. stock markets as well. The yield curve has been so flat for so long that fixed income expertise is not looked on as favorably as it has been in the past. These people are naturally curious, have strong opinions and a vision. Successful CIOs, the ones who are notable, didn’t just inherit their role and stop. Rather, they have had a viewpoint and exercised it. Chief investment officers for public funds are not as highly compensated as other areas of investment management. We find that they genuinely love investing, engage with their communities (not many of these are in NYC) and have a passion for the difference they can make to their beneficiaries.
“We see investment officers in high demand across our platform. We have noticed high expertise requirements in the pension and retirement areas from clients like the State of Alaska and the Alaska Permanent Fund, but demand is also high in the family office and endowment spaces. We have also seen growing demand for top drawer CIO leaders.”
What are some peculiarities of recruiting here in Alaska, Carol, while your daily perch is in New York City? Are there inherent difficulties in convincing talented investment leaders to consider a position in Alaska?
As a recruiter, I had to take the time to know the location. I also had to find a way to represent the whole opportunity, not just the job, to potential candidates. Taking the time to visit the client, to go to the chamber of commerce, to look at the schools and the real estate in advance of a potential candidate visit helps. Our first interview with Russell Read, the now CIO of the Alaska Permanent Fund, was via Skype when he was in Rowanda. Russell was most recently with Gulf Investment in the Middle East. He was truly excited about Juneau from our first interactions with him. And, honestly, that tends to be the case. This is a place people have likely never thought of moving to before. Hiring managers for each of the Alaska roles relocated to Juneau from New York City. In one sense, it can be easy to capture their imagination about what it is like in Alaska.
Have you traveled there?
In fact, we went to Juneau once for the Alaska Permanent Fund search last year. For this search we are planning two trips up. Juneau is a great town. The funds in Alaska are also quite large. APFC is more than $50 billion and for this role it is more than $42 billion. There is enough complexity to make these roles, no matter how remote they might seem, very important to a lot of people. So, people are very happy to discuss the opportunity with us. That said, there are many who will not relocate to Alaska. But they probably would not relocate beyond two to four cities from where they’re based anyway. So the geography is a challenge, but not as large as one would expect.
Can you share some of your other chief investment officers search work?
We placed the CIO for Alaska Permanent Fund, of course. Others we have done include CIOs for several billion dollar family offices (we can’t share which families those are for). We have also found leaders for various asset classes, manager selection and FOF platforms. I like to point to some of the leaders I’ve placed who are still in their seats. Marie Chandoha at Schwab Investment Management comes to mind. I even placed her predecessor, Randy Merk, into that role. We also just placed Joe Cavatoni as head of World Gold Trust. It’s an active area for us, and getting busier.
Contributed by Dale M. Zupsansky, Managing Editor, Hunt Scanlon Media