How to Reach the Allocator C-Suite, From the Investors Who Did It

“The best thing is to be open,” one endowment CIO says.

(Takaaki Iwabu/Bloomberg)

(Takaaki Iwabu/Bloomberg)

Among the highest ranks of asset allocators, few started their careers aspiring to be in the positions they hold today. Instead, they grew into it, dipping their toes into little pools until they stumbled into the ocean.

At least, that’s how it went for Catherine Ulozas, CIO at Drexel University’s investment office.

After graduating from her MBA program, Ulozas set her sights on a career in corporate finance. She started out as an analyst at a large insurance company in Hartford, Connecticut, and from there she moved into corporate finance. Then, in an unexpected turn of events, she became a bond trader.

“All of those things that happened in the very beginning of my career were opportunities that I either saw and applied for or people asked me to apply for,” Ulozas told Institutional Investor. “I really didn’t know. One day, I was an analyst on a public bond desk, and the next, the head of the unit came in and said, ‘You’re a mortgage-backed trader.’ Just like that.”

Jose Gonzalez, investment officer at the Teachers Retirement System of Illinois, had a similar experience. “My goal in life was to be a trader,” he said. “But my career path shifted because of personal reasons.”

Elizabeth Burton, CIO of the Employees’ Retirement System of Hawaii, majored in history and French in her undergrad studies at Washington and Lee. She had no intention of going into finance until a summer internship at a fund-of-funds put her on the path.

“There’s a ton of different jobs in investments,” Burton told II. “Who knows what you’re going to want to be down the road.”

As a mortgage-backed trader, Ulozas remembered feeling scared and unnerved. She had a mortgage, but that was the extent of her expertise on the subject. Over time, she got the hang of it, picking up skills and tricks inside the lion’s den.

“I will always be thankful for those opportunities that sometimes were above me and sometimes, quite frankly, below me,” Ulozas said. “They all taught me a lot — things I took with me, skill sets, knowledge, and the ability to have a greater group of work-related colleagues than I would have had if I had just let myself be pigeonholed.”

Move Up or Move Out

For the past four decades, Charles Skorina has watched institutional talent like Ulozas and Burton move up the ranks and into high-power positions.

Skorina is a managing partner of Charles A. Skorina & Company, an executive search firm that recruits corner office candidates for asset managers, endowments, foundations, family offices, private equity firms, and hedge funds. He has helped in countless searches, including the appointment of investment consultant Alan Biller and Associates’ chief executive officer last year.

According to Skorina, there are two ways to get a high-level job at an institution: move up via succession, or move out. For example, most endowments, like those at Harvard, Yale, Princeton, and the University of Pennsylvania, have a small but mighty staff, ranging from 12 to 20, making the window for succession obvious and tiny.

“Most staffs are small,” Skorina told II. “With a staff of five or six or seven, everybody backs each other up. So you’re cross-trained whether you want to be or not.”

But most successor picks for top roles aren’t internal. At larger institutions, succession “looks terrible,” Skorina said — and that’s where executive search firms like his come into the picture.

When conducting executive talent searches at, for example, non-profit institutions, Skorina said he values a diversity of experience, but, in particular, he looks for solid work in the private markets.

“Number one: Do they have private market experience?” Skorina said. “There is value in selecting private equity and venture capital managers.”

At public pensions, recruiters look for a more political skillset. Administrative and relationship management are priorities to the decision makers at these institutions, Skorina said.

“You have to get along with the elected boards,” he added. “In most cases, it’s less about investing and more about getting along and communicating.”

Allocator Breeding Grounds

Some investment shops are better at moving people around than others. In Skorina’s opinion, only a small portion of existing endowments, foundations, and hospital systems are run by chief investment officers with strong training programs and robust opportunities for upward mobility.

The University of Washington is one such institution. Its investment office has one of the most robust training programs for junior talent in the country, according to Skorina.

But others also exist. At Drexel University, the investment office offers co-ops —university-approved part-time employment — for undergraduate and graduate students interested in careers in financial services. At the Teacher Retirement System of Texas, employees are encouraged to participate in TRS University, an internal program that allocates at least 20 hours a year to various career development courses and presentations. Activities range from a one-off presentation by an industry leader to week-long courses on corporate finance and accounting, according to CIO Jase Auby. Auby said TRS also has internal mentorship programs.

According to Auby, a public pension plan is a great place to jump-start a career. For one thing, employees are exposed to all asset classes when they work with a pension plan’s portfolio.

“Your exposure is not siloed to one asset class,” he said. “Also, you have routine interactions with the most senior leaders of the most prominent investment firms in the investment management industry. There is no better grounding or training for a future as an investor.”

At the Kellogg Foundation, the investment team offers junior analysts an onboarding plan, an organizational “buddy,” mentorship, and tuition reimbursement for certifications and advanced degrees, according to CIO Carlos Rangel.

“We believe in fostering a flat organizational model where analysts apprenticeship and practice the business of investment side-by-side with the senior investment professionals in our team,” he said via email.

‘Constantly Networking’

While some asset owners are large enough to accommodate streamlined training programs, others, like the ERS of Hawaii, are small offices housing a core team of three or four people. For CIO Elizabeth Burton, the training comes by doing the job every day and heeding the sage advice of seasoned colleagues.

“I am the junior staff,” Burton said. “In a lot of ways they mentor me. In a lot of cases, they have decades more investment experience than me.”

TRS Illinois has a similarly small team: Understaffed and lacking resources, the staff has experienced high turnover of late, said Gonzalez, who oversees the fund’s diverse and emerging managers program.

Despite these challenges, TRS of Illinois offers a rotational program for new hires. Under this program, junior employees are placed with one asset class for a year before shifting to another one.

“If we choose to park you in an asset class, that’s what we do,” Gonzalez said.

Perhaps more important than a training program is a strong network, Gonzalez said. For junior (and senior) talent with lofty career goals, it’s a good idea to secure a position that allows for frequent networking opportunities, he said.

“If you’re going to make the jump to allocator, work for a consulting firm or a general partner — somewhere where you’re constantly networking,” he added.

Networking is the most fundamental part of his job, Gonzalez said. For someone just starting out in their career, a well-connected web of peers and mentors can make the job application process easier.

“You can also easily jump from one place to another,” Gonzalez said.

For the future generation of institutional talent, allocators interviewed for this story universally warned against putting oneself in a box. Instead, they encouraged developing a diverse set of skills, understanding who turns the gears inside of a corporation, and being flexible on the path to the top.

“Don’t plan your career in a set way,” Ulozas said. “The best thing is to be open.”

Auby offered a similar sentiment: “Be open to the opportunities that are presented to you, and don’t compare yourself to others.”