Two months before he was tapped to oversee the California Public Employees’ Retirement System’s $20 billion alternative-investments portfolio, Leon Shahinian was already writing the business plan for the current fiscal year.
His boss, Richard Hayes, had assigned him the task anticipating that Shahinian -- a six-year CalPERS veteran and Hayes’s own first hire in 1998 -- would be the best choice to carry the private equity program forward after Hayes left to join Fort Worth, Texasbased investment company Oak Hill Capital Management as a general partner.
Shahinian passed his mentor’s test with flying colors and last month succeeded Hayes as senior investment officer for the vast, globally diversified private equity portfolio. Near term he is focused on managing the transition and talking with CalPERS’s top-performing outside managers about how best to put committed capital to work. In time he wants to enhance the geographic diversification of the portfolio, paying particular attention to opportunities in Europe and Asia. “We continue to be optimistic about buyout and restructuring in the U.S. as well as in Europe,” Shahinian says. “In Asia I think the opportunities are more on the distressed side.”
Although the resurgent investing climate has increased the risk of more Hayes-like staff defections, Shahinian is confident that he can hold on to his team, which includes three other investment professionals, four analysts and an administrative support crew. “I’d never worked for a public agency before coming here,” says the 38-year-old investment chief, who before joining CalPERS was a fixed-income portfolio manager for Foundation Health Systems, a California insurer. “I’d never even envisioned it. But once I came on board and understood the creative nature of the program and how much flexibility we had, it was really exciting. It still is. You don’t really feel like you’re working for a state agency.” At least, not until payday.
