After the financial crisis reduced the city of Nashvilles now$2.8 billion pension fund by almost a quarter of its value, CIO Fadi BouSamra became a determined investor in alternative fixed income. We accepted that we had to do things differently than in the past since the plan was getting relatively large in proportion to the citys budget, says BouSamra, 46, who fell in love with Tennessees Music City as an undergraduate business student at Belmont University in the early 90s. We can still achieve good risk-adjusted returns in the U.S. residential loan market and commercial bridge loans. The U.S. energy industry is providing an opportunity for rescue financing and outright asset purchases from overlevered balance sheets. Since 2008, BouSamra has halved the citys once79 percent allocation to equities and added a couple of dozen alternative fixed-income funds for a 17 percent allocation. He also invests about 12.5 percent in traditional fixed income, 9 percent in private equity, 23 percent in U.S. public equity, 16 percent in international equity and 10.5 percent in long-short equity. During the past decade the fund has achieved its goal of delivering a 7.5 percent annualized return; its five-year return is 11 percent. Before joining Nashville in 2003, when the fund was at $1.1 billion, BouSamra worked as a registered investment adviser at American Express Financial Advisors in Nashville.
The 2015 U.S. Investment Management AwardsClick to View Profile