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Institutional Investor is pleased to announce the finalists for the first annual Allocators’ Choice Awards.

Finalists were chosen based on nominations submitted over the summer and vetted by Institutional Investor’s editorial team. Starting this week, asset allocators will cast ballots for the ultimate winners, to be crowned on November 28, 2017, at dinner in New York City.

The inaugural awards dinner will follow the Masterclass — an afternoon of discussion among an exclusive group of asset allocators and managers, where attendees will share, debate, and tackle institutional investing’s intractable problems.

Peer voting will occur in partnership with IIN, Institutional Investor’s private network for asset owners.

Allocators, request an invitation now to the Masterclass and dinner.

The Finalists

PARTNERSHIP OF THE YEAR 

Caisse de dépôt et placement du Québec & GE (Michael Sabia, President/CEO) 

Caisse de dépôt and GE joined forces this year when the pension fund and industrial company partnered to create a $2 billion aircraft financing platform via GE Capital Aviation Services. It wasn’t the first time in 2017 that the two giants worked together: Just months before, Caisse acquired GE Water alongside water optimization and waste recovery firm SUEZ. 

California State Teacher’ Retirement System & State Street Global Advisors (Chris Ailman, CIO)

Last year, CalSTRS provided a $250 million seed for SSGA’s SHE index – an ETF tracking companies with gender-diverse management teams. One year later, the pension fund and asset manager have taken their diversity initiative one step further, using their combined firepower to pressure public companies into putting more women on boards. 

Hartford HealthCare & Neuberger Berman (David Holmgren, CIO)

CIO David Holmgren and his team pride themselves on their close connections with fund managers, and the fund’s relationship with Neuberger Berman is no exception. From Hartford Healthcare’s first-ever private equity commitment to a Neuberger secondaries fund in 2013, to seeding an untested “consumer brand-licensing” strategy in more recent years, to co-sponsoring gatherings of investment professionals, the two organizations have built a lasting strategic partnership. 

New Jersey Division of Investment & BlackRock (Chris McDonough, Director/CIO)

New Jersey partnered with BlackRock on “the Fund Alignment and Incentive Reform (FAIR) program, with a commitment of $1 billion” focused on “risk mitigation strategies.” Targeting an average “1% management fee and 10% incentive fee, with hurdles,” the fee model checks in well below standard fund terms. 

New Jersey Division of Investment & Owl Rock (Chris McDonough, Director/CIO)

Ask about business development companies and institutional investors — or strategic partnerships at all — and everyone will tell you to talk to New Jersey. The massive public fund is renowned for getting fee deals from top-notch managers that others lust after. Often, it’s because they invest in managers when they need it, as with Owl Rock. Thanks to a seed investment in this burgeoning BDC, NJ’s pensioners have a stake in the firm’s revenue as it grows. And “Owl Rock is rock-solid — one of the best,” says a BDC expert. 

Teacher Retirement System of Texas & Albourne Partners (Jerry Albright, CIO; Britt Harris, former CIO)

The hedge fund industry held its collective breath when Albourne and Texas Teachers released its “hugely innovative ‘1 or 30’ fee structure proposition” — a model that would allow Texas to retain 70% of alpha share from its hedge funds. The result: almost all of Teachers’ hedge fund partners accepted the terms, “ensuring that unlike many public pension plans, the majority of benefits from hedge fund investments end up in the allocators’ hands.” 

Texas Tech University & Corrum Capital Management (Tim Barrett, Associate Vice Chancellor/CIO)

Texas Tech, “in addition to some great hires,” has established a “trade finance platform with Charlotte-based Corrum Capital,” the result of “Tim Barrett reaching out to them and wanting to be in trade finance — an area with low-default rates, high recovery rates, and banks moving out of the space.” Texas Tech “seeded a fund with them — named the Alternative Income Fund — and Corrum have gone out and built a global platform to deploy TTU capital.” Two years in the making, the fund is providing “very solid, now low-double digits returns.” 

TURNAROUND OF THE YEAR 

American Red Cross (Greg Williamson, CIO)

As one nominee put it, “Greg has almost single-handedly transformed the American Red Cross to function like a modern asset manager rather than a sleepy foundation.” He rebuilt the back office, risk management systems, and investment team by “working seven days a week” and hiring strong talent, such as Jane Western (formerly Boeing’s longtime operations head) and Carol Anne Lindsey (an alum of George Washington University’s endowment). 

Delta Air Lines (Jonathan Glidden, Managing Director, Pensions)

Shortly after Jon Glidden joined Delta’s defined benefit plan in 2011, percent-funded status dipped into the 30s. In-house staff dropped from 25 to 7, and Glidden came up with an entirely new plan for the fund’s recovery: A three-pronged outsourcing arrangement, with the small internal team — led by Glidden and Amanda Cogar, his deputy — supported by an asset manager partner and independent consultant. Overtop all that is a portable alpha strategy that’s delivered un-corporate-like returns, and the backing of Delta’s CFO. The OCIO model has evolved since then, and so has the funded status: 49 percent at last check, and on track to 80 percent by 2020. 

New York City Retirement Systems (Scott Evans, CIO/Deputy Comptroller for Asset Management)

In the three years of CIO Scott Evans’ tenure, New York City’s Bureau of Asset Management has cleaned up its “embarrassingly abominable” office space, hiked up the compensation for its underpaid staff, simplified its governance structure, and filled in gaps in the investment team with new hires. Though Evans could soon be on his way out – the pension system’s CIOs typically serve the same term as the city comptroller – he’s built a lasting foundation for managing New York City’s pensions. 

OPTrust (James Davis, CIO)

“What used to be a very conservative and plain-vanilla plan, James Davis is building into a new Ontario Teachers’.” OPTrust’s CIO came over from “the Mothership” — Ontario Teachers’ Pension Plan — in September 2015, where he’d been chief economist. Since then, the fund has been busy “implementing a completely new asset allocation, expanding the team, and bringing some trading in-house.” Welcome to the big leagues of Canadian Giants. 

Texas Municipal Retirement System (TJ Carlson, CIO)

Despite “fewer resources and more governance challenges” than its peers, TMRS under TJ Carlson has seen a “wholesale shift in asset allocation,” going from “essentially core fixed income and public stocks to being globally diversified across all asset classes.” In the “few short years” Carlson has been working at TMRS, the investment team “has grown from 4 to 17, and has built out external manager relationships from 14 to nearly 100, the result of 4,000 hours’ worth of manager meetings.” And, according to one nominator, “this wasn’t simply replicating an ‘endowment lite’ approach to asset allocation, but rather a thoughtful construction exercise combining mean-variance optimization, risk budgeting, and liability-aware investing.” 

TECHNOLOGY USER OF THE YEAR 

GIC (Jeffrey Jaensubhakij, CIO)

GIC’s job postings say it all: Sr. Quantitative Engineer, Data Scientist, Cloud Engineer, Distributed Computer Engineer, and so on. The Singaporean sovereign fund is “maybe the only institution doing in-house quant, machine learning, etc. — and they’re very serious about it.” Recent hires suggest so: GIC’s first Chief Technology Officer Wu Choy Peng started in August, as did a new board member, veteran technology investor Koh Boon Hwee, HP’s former MD for Singapore. 

Northwestern University (William McLean, VP and CIO)

Northwestern’s $10 billion endowment was “an early adopter” of Solovis, an off-the-shelf portfolio and risk management system specifically for institutions, family offices, and outsourced-CIOs. The platform has taken off with some top nonprofits, and Northwestern has a cut of the business: It “saw an opportunity” and made “valuable, direct” VC investments in the Dallas-based start-up. 

State of Wisconsin Investment Board (David Villa, CIO)

For the completion of a “three-and-a-half year, $48 million technology overhaul” with the help of project consultant Citisoft, an undertaking “involving eight new technology solutions to deploy daily investment book of record data supporting the long-term needs of the investment management group” — and which required “replacing the entire technology infrastructure.” The enterprise, according to Citisoft, is “one of the most transformative projects by either a public or private pension fund.” 

CHANGE MAKER OF THE YEAR 

Contra Costa County Employees’ Retirement Association (Timothy Price, CIO)

The “functionally focused portfolio” — brought in by CIO Tim Price and his deputy – is essentially liability-driven investing (LDI) for a public-pension fund. A pension fund does three things, according to CCCERA: It pays current benefits, grows assets for future benefit payments, and weathers markets to ensure the delivery of the first two. For each function — liquidity, growth, and hedging — the investment team modeled a dedicated portfolio, so the assets overall no longer needed to serve three functional masters. With the input of CCERA’s new consultant Verus and execution by LDI-specialist Insight Investments, they did something that’s never been done before. 

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