II’s Most Wanted Allocators: Methodology

The science behind the 2019 wish list of not-yet CIOs.

Illustration by II

Illustration by II

The top talent brokers helped II’s editors design the original formula to quantify desirability and score candidates, according to what they said matters in a first-time CIO. But there is a difference between what recruiters say they want and what they truly prize. For that reason, II has revised the scoring formula to highlight the qualities gatekeepers focus most on and deemphasize performance, which came up infrequently in their reviews of allocators.

Portfolio Management: 40%

  • Investment track record: 15%
  • Exposure to complex investments and asset classes: 15%
  • Manager relations and access: 10%

Non-Portfolio Management: 60%

  • Management and leadership skills: 20%
  • Communication, interpersonal skills, and board interaction experience: 20%
  • Pedigree, including employer reputation, education, and training: 20%

The new “pedigree” category replaces “fund reputation,” and has been allotted double the importance. Scores primarily rest on the reputation of allocators’ current and previous employers (weighted more heavily for longer tenures), but also reflect their education, credentials (e.g., CFA designations), whom they’ve trained under, board seats and extracurriculars, and overall resumes.
Investment track record is scored based on fund-wide performance over time horizons relevant to individuals’ tenures and benchmarked against peer-group medians. For endowments and foundations, II used a private database of more than 100 U.S. nonprofits. For public pension funds and sovereign wealth funds, II used the Wilshire Trust Universe Comparison Service. When an institution’s returns could not be obtained, individuals received a score of 7. Individuals who recently changed jobs were graded based on the performance of their previous employers during their tenures.

With these criteria in hand, II editors collected, vetted, and scored reams of recommendations, sourced primarily from the leading recruiters on three continents, but also from asset managers, consultants, and CIOs themselves. When more than one investor received the same total score, ties were broken by the portfolio management score, such that the higher ranking went to the better investor.

Most Wanted Allocators lists recruiters’ fantasy draft picks, not free agents — to an extent: Allocators assumed to be unmovable (Yale’s Dean Takahashi, say) were ignored; so were individuals with no previous allocating experience. Otherwise, any institutional allocator worldwide, regardless of age or fund size, was fair game. Some may have decided long ago to remain pure investors, and that the work of coddling board members, managing scandals, and debating salaries wasn’t for them. To those who see members of their staff listed, congratulations! Take this as a testament to your ability to develop talent — and an annual market valuation of it.

The First Team (ranked No. 1 through No. 25) can be found here.

The Second Team (ranked No. 26 through No. 50) can be found here.