2014 Top Small Public Pension Investor: Paul Doane

The CIO of St. Paul Teachers’ Retirement Association shaped the fund’s portfolio strategy, which resulted in returns of 13.9 percent.

Paul Doane

Paul Doane

Managing a public pension fund is as much about politics and combat as it is about investing. Paul Doane brings decades of experience in all of those to his role as CIO of the St. Paul Teachers’ Retirement Association, which has $938 million in assets. A decorated combat naval officer, Doane served four terms in the Massachusetts Senate and spent 15 years at Oppenheimer Capital, working with major public pension clients. He was also executive director of Massachusetts Pension Reserves Investment Management and later the Arkansas Teacher Retirement System. Though Doane was planning to retire after his stint in Arkansas, a St. Paul trustee persuaded him in 2011 to come to Minnesota, analyze the portfolio’s strategy and mentor the next director. When Doane arrived, the plan was heavily tilted to U.S. equities. After an asset liability study, the CIO began shifting the portfolio, making it more global; he introduced new categories, including an inflation hedge, and made a large commitment to direct private equity and alternatives. He got rid of passive fixed income and introduced high-yield bonds and unconstrained fixed income. “My basic philosophy, which has evolved over the years, is to give managers broad latitude rather than handing out narrow assignments,” says Doane, 71. The fund returned 13.9 percent for the year ended June 30, 2013, compared with its benchmark’s 12.70 percent.