Another Hospital System Fires CIO, Hires Morgan Stanley to Manage Investments

Vanderbilt’s Medical Center has outsourced its portfolio to Graystone Consulting less than two months after Hartford HealthCare.

Illustration by II

Illustration by II

Another hospital system has brought in Morgan Stanley as an outsourced chief investment officer after firing its CIO.

Vanderbilt University Medical Center is following in Hartford HealthCare’s footsteps, outsourcing its investments to Morgan Stanley, two sources familiar with the situation have confirmed.

Alaine Zachary, the organization’s CIO and vice president of treasury since 2015, was let go in October, according to one of the sources. Zachary did not return a request for comment.

The news comes less than two months after Hartford HealthCare suddenly fired its entire investment staff, including its well-regarded CIO, David Holmgren. The organization chose to outsource its $4.3 billion in assets to Morgan Stanley.

Five investment committee members, who were not included in the decision-making process at Hartford, resigned days after learning that the investment staff had been terminated. The move was called “shocking” by committee chair David Roth.

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It’s unclear when Vanderbilt made its decision to outsource. Spokespeople for the hospital and for Morgan Stanley declined to comment. Morgan Stanley’s Graystone Consulting unit will manage VUMC’s assets.

VUMC’s 2021 audit report shows that the hospital managed roughly $1.15 billion in assets at the time. The portfolio was heavily tilted toward credit, with the largest allocations made to corporate bonds and fixed income mutual funds.

In 2016, VUMC split from Vanderbilt University, moving its assets into a not-for-profit corporation, according to Vanderbilt University documents. Zachary had joined VUMC prior to the split and facilitated the establishment of the new entity’s treasury department.

Chris Ip, who had been director of treasury at VUMC, left in August, his LinkedIn profile shows. He is now the chief investment officer at North Carolina State University.

According to Zachary’s LinkedIn profile, her team had seven members. It’s unclear whether they are still with VUMC.

Prior to her work at Vanderbilt, Zachary served as director of investments and treasury for BlueCross BlueShield of Tennessee, managing cash and investments of over $2 billion. She also held roles at Sisters of Charity of St. Augustine Health System, Peru’s Interbank Corporation, and Salomon Brothers.

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