Peter Gilbert Is Endowment Alpha Man

Over his 40-year-career, the former CIO of Lehigh University and Pennsylvania SERS became a devotee of alternatives and portable alpha.

From the outset of his 40-year career, Peter Gilbert was on a path that, through both professional and volunteer roles, would touch the lives of thousands of people. His chosen route: managing financial assets for public employees and a university community. He also served on numerous financial industry commissions and committees aimed at achieving best practices, including the investors’ committee of the U.S. President’s Working Group on Financial Markets and the Conference Board’s Blue-Ribbon Commission on Public Trust and Private Enterprise.

Gilbert, who retired as CIO of Lehigh University in November, arrived on the Bethlehem, Pennsylvania, campus in 2007 to bring professional asset management to an endowment fund that was approaching $1 billion in assets. But the financial crisis was looming. “It was a very difficult time to start up an investment office,” says Gilbert, 69. “It was about holding things together and keeping people focused on what we had to do longer-term to put a program together.”

Working with a board of trustees made up mostly of investment professionals, Gilbert hired an investment team and, following the crisis-driven losses, grew the endowment to about $1.2 billion before his departure. “We moved Lehigh into a more diverse portfolio so it looked like other endowments,” he explains.

Before joining Lehigh, Gilbert oversaw the then-$34 billion Pennsylvania State Employees’ Retirement System portfolio in Harrisburg. Starting in 1993, he forged a path of investment innovation to earn the highest returns for SERS fund members. In 1999, Gilbert began building what would become one of the largest hedge fund portfolios among U.S. public pension funds, representing more than a quarter of his plan’s assets, and became a devotee of portable alpha, an investment strategy that typically uses hedge funds to generate above-market returns (alpha), which are then combined with equity index futures or swaps. During his 14-year tenure at SERS, Gilbert also invested in close to 250 venture capital and private equity funds.

Gilbert began his pension career working in the New York City Comptroller’s Office, in the research and liaison unit, after earning a master’s degree in social policy, management and planning in 1976 from Columbia University. In 1990 he was appointed director of the pension unit of the New York City Mayor’s Office, where he represented the mayor and finance commissioner as a trustee for the city’s four largest pension funds, overseeing more than $46 billion in assets.

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