A dislocated market. Forced sellers liquidating high-quality assets. Scant and undercapitalized buyers.
As layoffs, cutbacks, and furloughs hit asset management, Massachusetts’ $77 billion public investment arm saw an opportunistic play.
“We’ve been debating internally: What’s the best investment we can make right now?” said Eric Nierenberg, chief strategy officer for Massachusetts Pension Reserves Investment Management (MassPRIM). The answer: “Talent.”
Nierenberg and his colleagues have observed a spike in free agents. Investment professionals — many of them excellent — are losing their jobs in Covid-19-related cuts or leaving voluntarily, only to find few decent options and abundant competition. “We think this may be an opportunity to attract talent,” Nierenberg told Institutional Investor Thursday. “The way we see it, hiring the right staff can actually save money instead of just being a cost center.”
Unlike many U.S. public funds, MassPRIM controls its own payroll and staffing. The Boston-based organization can hire the best people and create roles for them, more similar to a private-sector outfit, rather than lobbying politicians to approve a new analyst position or sign off on a bonus plan.
“We can be very opportunistic,” the Harvard-trained investor said. MassPRIM’s casting a wide net, looking to snap up the best candidates for its growing team, regardless of seniority level and specialties. Their pitch to prospects? “Work with great, smart, like-minded people on a very stable team.” (The last senior departure was in 2017, and is still vividly remembered.) “You can be at a hotbed of innovation, even at a U.S. public pension fund. The team’s focused on doing the right thing and leaving politics out of it,” Nierenberg said.
For years, poor compensation undercut MassPRIM’s recruiting and retention abilities. Even by the shabby standards of U.S. public funds, Massachusetts’ stood as a miser.
But a successful campaign by longtime leader Michael Trotsky has brought pay to the upper end of its peer group. Trotsky, for example, made nearly $900,000 last year between salary and bonuses, public records show. Nierenberg earned $553,000.
MassPRIM still watches costs closely; it’s running the recruitment process in-house rather than paying a full-service headhunter. A handful of job postings on its website give prospective candidates a few more details and portal to apply, but the listings are far from comprehensive. “Those are all effectively flexible,” the strategy head said. “We’re looking for people who want to be on the allocator side and are in it for the long haul.”