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2011 U.S. Investment Management Award Winner for Large Corporate Manager

3M Investment Management Corp. president Dennis Duerst's three-year stint as the company's director of financial risk management gave him the edge that allowed the pension plan for the maker of Post-its to weather the financial crisis and outperform last year.

Dennis Duerst Dennis Duerst
President, 3M Investment Management Corp.
Award: Large Corporate

Sometimes it’s good to be the outsider. Dennis Duerst, now president of 3M Investment Management Corp., may have been with parent 3M Co. for more than two decades, but it was his three-year stint as director of financial risk management in the company’s treasury division that gave him the edge that allowed the pension plan for the maker of Post-its to weather the financial crisis and outperform last year.

When Duerst took on the role of CIO in 2003, he inherited a portfolio that was still heavily tilted toward equities, with a large chunk of private equity and a smaller slice of international stocks. He used his knowledge of corporate financial and balance-­sheet risk to build a framework for understanding the fund’s liabilities. This step was necessary to persuading 3M’s senior management to buy into a liability-driven investment plan well before many of his peers had adopted the practice.

In the middle of the last decade, Duerst, 52, started bringing down the portfolio’s equity exposure and picking active managers to replace a largely indexed stock portfolio. In 2007 he started diversifying the fixed-income portfolio into long-duration, corporate high-yield, emerging-markets and mortgage debt. Today it has different duration targets through cash instruments and derivatives. In 2010, Duerst, who holds an MBA in finance from the Carlson School of Management at the University of Minnesota, and his eight-person team delivered a 14.4 percent return for 3M’s $15 billion in pension assets.

Click here to access the profile index for the 2011 U.S. Investment Management Award Winners. Read the feature story, Best of the Best Money Managers.

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