January 11, 2018 – Demand for executive level, “high impact” investing talent has been on the rise, and in the years ahead it is expected to soar. Recruiters say the need for chief investment officers across the asset allocator spectrum, including endowments and foundations, and corporate, public and state plans, have significantly increased in number over the last five years as expectations of performance has ratcheted up since the financial crisis.
One organization seeking new investment leadership is the $219.6 billion West Sacramento-based California State Teachers’ Retirement System (CalSTRS) which has retained executive search firm EFL Associates to finds its next deputy chief investment officer. Current CIO Michelle Cunningham will be retiring. Executive vice president Mary L. Hobson is leading the search along with SVP and managing director Daniel J. Cummings.
The deputy chief investment officer serves as chief executive over the asset class investment directors and has responsibility for management of the investment asset classes. The executive provides management for the internal and external investment portfolio, executes investment committee policies and the investment management plan.
The incoming leader must have outstanding investment management acumen and experience — ideally at least 10 to15 years — managing large institutional portfolios, with good track record of risk controls and performance, said EFL. The individual must exhibit strong leadership competencies, including: decision making, developing and empowering others, global perspective, influencing skills, innovation and fund performance management, efficiently and effectively managing work, market knowledge, organizational awareness, professional confidence, results orientation, risk management, and strategic thinking and implementation.
The base salary range is said to be between $272,000 and $320,000, with incentive compensation of up 80 percent of the base salary.
The California State Teachers’ Retirement System is the largest educator-only retirement fund in the world and the second largest public pension fund in the United States. The organization’s primary responsibility is to provide retirement benefits to California public school educators from pre-kindergarten through community college. It serves over 900,000 members.
EFL Associates provides talent management solutions from offices in Kansas City, Denver, Houston, New York City and St. Louis. The firm specializes in the following areas: finance & banking, higher education, non-profit, life sciences, energy, construction & engineering, consumer packaged goods, manufacturing, public pension organizations, chief financial officers and board services.
Based in Denver, Ms. Hobson has extensive business experience in the general management, legal, and financial arenas. Since joining EFL Associates, she has completed over 250 executive search assignments.
Mr. Cummings brings over 30 years of diverse business experience to EFL’s Denver office and his clients. He directs all aspects of highly targeted search assignments, from investigation of organizational talent needs through candidate identification, evaluation, selection and project completion.
Investment Professionals Difficult to Find
As globalization, change, and disruption create opportunities and risks in the investment management sector, demand for seasoned financial talent is rising. However, recruiters say that given their multi-disciplinary and evolving nature, investment officer roles can be difficult to develop and ultimately recruit for.
“Recruiting top talent in our space has always been challenging and, even with the ongoing advances in technology and proliferation of third-party candidate databases, it will not get easier,” said David Barrett, managing partner of David Barrett Partners, a boutique search firm which recruits senior and C-level professionals for the investment and wealth management sector. Since successful professionals are well compensated throughout the sector, most have little incentive or reason to consider moving elsewhere, said Mr. Barrett.
“In an increasingly competitive marketplace, the challenge for recruiters in this space will be to demonstrate that they have the relationships, market credibility and industry knowledge to not just serve up candidates, but to deliver the right candidates,” he said.
“Demand for CIOs in alternatives, especially real assets, is on the rise as firms take the lead from investors increasingly seeking assets with lower correlation to the stock and bond markets and higher returns,” said Maria de Rossi, a partner at Odgers Berndtson, who specializes in financial services with a focus on alternative asset management, investment banking and private equity.
Turning to Search Firms
A number of organizations of all types of have turned to executive recruiters in recent months to help find new investment leaders. Here’s a sampling from the Hunt Scanlon Media archives:
The New York Public Library recently enlisted executive recruiter Goldsmith & C. to lead the hunt to replace outgoing chief investment officer Todd Corbin. The new CIO will inherit greater assets than Mr. Corbin had when he took the job amid the economic crisis. Under Mr. Corbin’s leadership, the endowment grew to $1.04 billion, across 418 individual funds.
Heidrick & Struggles recently recruited Douglas C. Wesley as chief investment officer of Illinois State Universities Retirement System (SURS), an agency in the State of Illinois government that administers retirement, disability, death, and survivor benefits to eligible SURS participants and annuitants.
David Barrett Partners placed Alice A. Ruth as CIO of Dartmouth College. Ms. Ruth, who spent the last eight years as chief investment officer for Michael Bloomberg’s family office, Willett Advisors, will oversee Dartmouth’s investment office and management of the College’s $4.5 billion endowment.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Will Schatz, Managing Editor – Hunt Scanlon Media