By Susan Barreto
When the music stops, who wins this game of musical chairs?
There are after all many variables – market
volatility, pension holidays, rising unemployment, and a
general gloom due to the ongoing financial crisis. It seems
it’s a perfect time to find a new job for many
CIOs at endowments and pension funds.
Most head hunters reported a lull in searches and hirings at
the beginning of the financial crisis, but now it seems
activity in the institutional investor sector has picked up
again with a number of high profile moves in recent weeks and
Stanley Mavromates joined Mercer Investments as chief
investment officer for the Americas in late June (see page 5)
after 12 years at the $50 billion Massachusetts Pension
Reserves Investment Management Board, where he was chief
investment officer. His departure follows that of Michael
Travaglini, who joined Chicago-based Grosvenor Capital
Management in 2010.
Cornell University’s $5.3 billion endowment is
now overseen by AJ Edwards (see page 6), who was recently
appointed as chief investment officer after serving as interim
CIO since last May. The search for a new CIO began in 2010,
when James Walsh left to form a new hedge fund –
Srinvas Pulavarti, who joined Spider Management Company in
2005, is understood to be stepping down as chief investment
officer. During his tenure, the endowment at the University of
Richmond that is overseen by Spider Management Company has
grown from $1.2 billion to $1.9 billion.
So are these CIOs not being paid enough, are they at an
impasse with their investment committees or is this just more
fallout from 2008? Each case of course is unique, but in
uncertain times there seems to be just as much panic over
career risk as there is over market risk.
In the public pension fund community there is greater
interest in finding a job in the private sector. Some of this
may be due to the unsustainable deficits most of these funds
have racked up over the last 10 years or so. For instance, in
Chicago alone it was recently calculated that every man, woman
and child would need to come up with $15,000 to shore up local
government pension plans.
No one wants to be at the helm of a sinking ship. And that
may be why pension fund execs are less likely to move on to
another neighbouring pension fund programme.
That’s perhaps why Mavromates decided to move on
to a lucrative business of managing money within a consulting
firm. Massachusetts PRIM reported one year gains of only 0.19%
through 30 April. For the year to date, the fund was up 7.13%.
Both figures are gross of fees.
Also, Matthew Strube, former director of the Teachers
Retirement System of Texas, moved on to the private sector
within a portfolio research role at Mesirow Advanced
Strategies. Texas Teachers has recently been implementing
unique investment strategies including a strategic partnership
with Bridgewater. Performance has remained strong overall at
the pension fund, but expectations for long term returns
(particularly in absolute return strategies) have been
The availability of private sector jobs doesn’t
seem to be drying up, although funds of funds and consultants
are expected to have tough times too as fee pressures mount
with their institutional clients – many of whom are
The game of musical chairs in the world of endowments
continues, it seems. Investment staff changes at Yeshiva
University, Cornell University and University of Richmond point
to broader movements within the US endowment community.
Investment returns among the nation’s largest
endowments continue to be in the double digit range in some
instances, all while the interest in growing hedge fund
allocations seems to be waning (see page 16).
So what does this mean if you have institutional hedge fund
expertise? You may just want to dust off your resume and be
open to new opportunities.