After over a year with chief investment officer Leslie Lenzo at the helm, Hershey Trust has a new investment operations team, a repositioned portfolio, and a strategy in place to keep its refreshed team intact for years to come.
Lenzo joined the Hershey Trust in January 2023 from Advocate Aurora Health’s investment office, where she spent nine years as CIO. She replaced longtime CIO and CEO Janice Bratton, who served the company for 33 years.
When Lenzo arrived at Hershey Trust, “we had a good portfolio and a good team in place, but there were definitely aspects that were missing,” she said.
Early on, Lenzo and her team ran an asset allocation study, which led to some portfolio changes and turnover. For example, the Hershey Trust had historically tilted its assets toward international marketsto offset its exposure to the Hershey Company stock. However, after exploring that tilt, the team concluded that a better diversification strategy would be to make the public portfolio more global and then to add private market exposure in both equity and credit. (The Hershey Trust, which owns approximately 99.9 percent of the Hershey Company’s Class B shares, has also been slowly selling Hershey shares in an effort to diversify its holdings.)
Hershey has some longstanding private equity and venture manager relationships that Lenzo and her team will preserve. The trust is not currently invested in hedge funds but Lenzo said they are exploring opportunities in other asset classes.
Hershey’s structure as an income trust informs the way Lenzo thinks about investments. Unlike a university endowment or public pension fund, the Hershey Trust Company’s role is to serve as a trustee for the Milton Hershey School Trust, The M.S. Hershey Foundation and the Hershey Cemetery Perpetual Care Maintenance Trust. The mandate is to help operate the trust into perpetuity.
Because of the income trust structure at Hershey, Lenzo is excited about higher interest rates, both in fixed income and private credit. “We spend a lot of time in private credit, and that’s kind of a really nice income generator for us as well. That’s something that we’re excited about because of the yields we can get there,” she said. Within private credit, the investment team is focused on lower risk assets.
Oil and gas investments are also attractive to Hershey Trust’s investment team. “That’s an area where there’s just been a dearth of investment for a very, very long time,” Lenzo said. “So the opportunities that remain today, and there’s not a lot of people that can fund those opportunities.”
Investment operations was another area that she began working to change, as these roles were sprinkled throughout the organization, rather than designated to a specific team.
Lenzo has since built a four-person team to handle reporting and oversight, allowing the seven-person investment team to focus on sourcing managers and investment opportunities.
“Ultimately we want those investment professionals out there pounding the pavement, sourcing new managers, and making sure we have a top-notch portfolio, not filling out subscription documents and processing trades,” Lenzo said.
This wasn’t her first time building an investment operations group — Lenzo did the same at Advocate Aurora, Institutional Investor previously reported
Muzzamil Mussani, who previously worked in operations with Lenzo at Advocate Aurora, joined Hershey Trust in July as its vice president of investment operations and portfolio analytics. The organization also hired Northern Trust’s Andrew Consevage for its operations team, and is looking to hire an investment operations assistant.
Other staff additions include vice president of public markets Evril Clayton, who joined from Rockefeller University; senior financial analyst Harrison Rentschler, who joined from PFM Asset Management; and investment analysts Derek Hinebaugh, Tony Gyimah Jr, and Meg Richards.
Lenzo is thoughtful about developing and retaining these employees, as well as those who worked on Hershey Trust’s investment team before her arrival. She is working on building career ladders, which will give junior and mid-level team members clarity on their professional development and compensation at the company.. Her goal is to ensure that career growth will not depend on another employees departure to take place.
“My hope is that we have repositioned the portfolio and then all we need to do for the next 10 years is make tweaks around the edges as the environment changes,” Lenzo said. “I don’t want to make any more wholesale changes because I do think that you can be disruptive if you do that too often. And then the best way to have consistency with the portfolio is to have consistency with the team.”
