A few months into the job, Washington State Investment Board’s new chief investment officer is tackling a massive financial crisis on behalf of the $114 billion retirement system. 

The pension’s commingled trust fund, which manages investments on behalf of several of the state’s retirement funds, is down 5.87 percent for the first quarter, Allyson Tucker, who took the helm as investment chief in January, said at WSIB’s board meeting Thursday.

“It was definitely a tough quarter,” Tucker said. “Dare I say it was a brutal quarter. I think we can put the phrase ‘longest economic expansion on record’ away for a while.” 

Still, WSIB plans to stay its course, according to the CIO.

“We do run a strategic asset allocation, so you wouldn’t expect us to make huge tactical moves,” she said. “The markets were and continue to be very volatile.” 

According to Tucker, the commingled trust fund’s performance could fall further once private market returns are marked down.  

“Remember, we have a very large private markets allocation,” Tucker said. “We'll perform better in down markets while those write-downs will flow through the private markets through the course of a year.” 

Tucker said WSIB has a higher allocation to private markets than in the 2008 financial crisis or when the dot.com bubble burst two decades ago. But, she added, high private-market allocations during past downturns typically became problematic when they were leveraged at more than 100 percent. That’s the not the case with WSIB.

At present, WSIB’s private market assets are levered at less than 100 percent, Tucker said, helping to preserve liquidity.  

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WSIB reduced its equity allocation to 32 percent, from 37 percent, prior to the market downturn, according to Tucker. She said the proceeds from selling down the equity allocation were invested in fixed income and real assets.


Tucker was joined by Jason Trennert, founder of asset management and advisory firm Strategas Securities, and Howard Marks, co-founder of Oaktree Capital Management, at the meeting.  

“In my career, I've never compared anything to the Great Depression,” Trennert said. “But right now, it’s not a bad comparison.” 

Trennert said he was heartened by the federal government’s fast response to the crisis, though, noting it as a key difference between now and the Great Depression.  

Marks, meanwhile, expanded on several of the missives he’s issued over the past six weeks. WSIB has worked with Oaktree since 1995, he noted, adding that he was supposed to make it to the board’s February meeting, but that his plans were canceled over concerns about the virus.  

“It was the first really strong decision that I experienced,” Marks said. “It stood out, but of course, that was only six weeks ago. That has become normal.” 

According to Marks, everything investors worried about has come to pass.  

“Prices are on their bottoms,” he said. “The risk in the system that we were worried about has been exposed. We have a very good record of being able to turn aggressive at the bottom and buy in.” 

As for what’s next for the board? WSIB is looking to put some money to work in distressed debt, tangible assets, and real estate, Tucker said.  


“We learned last time that the pain, no matter how acute it may feel at the time, is temporary,” Tucker said.