The Oregon State Treasury is pushing for funds to add more than 30 new staff members to the investment office responsible for managing the state’s $72 billion pension fund.
In a presentation to the state legislature last week, the treasury requested a nearly $10 million budget increase to modernize and grow its investment management program. The additional funds would enable the state investment division to add 32 permanent positions to its staff, which oversees $94 billion in state funds including the Oregon Public Employees Retirement Fund. This would more than double the fund's investment staff, which now employs 30 people in the division. Currently, the investment program ranks in the bottom quartile for personnel numbers among peers of similar size and portfolio composition, according to a November 2016 CEM Benchmarking report.
“It is really just a skeleton crew,” said John Skjervem, the treasury’s CIO.
The proposal aims to “upgrade risk management capabilities and decrease reliance on external asset managers,” according to presentation materials. It follows a successful bid to increase the investment program’s budget during Oregon’s last legislative session — its first budget increase in “years,” according to Skjervem.
“We used [the last increase] to build the middle and back office,” he said. “This time around we want to put more boots on the ground in the investment office and in private markets in particular.”
If the budget is approved, Skjervem said the positions would be split between the investment front office and governance, operations, and support staff. He hopes to add two new investment officers to support the investment office’s $15 billion private equity portfolio, which is now run by just three people. The state legislature has not scheduled a vote on the treasury budget bill but needs to pass budgets before it adjourns. The last date to do this is July 10.
Former treasurer Ted Wheeler previously tried to bolster Oregon’s investment office by spinning the program out of the treasury and increasing its in-house capabilities, but was unsuccessful in getting a bill passed by the state legislature. Now, the treasury is run by Tobias Read, a former legislator who was elected treasurer last year.
With a new treasurer at the helm, Skjervem is optimistic they will be able to get the budget approved.
“We think the odds are very good,” he said.
