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Another Leadership Shakeup for Private Equity-Owned Russell Investments
The OCIO and investment firm has hired industry veterans from Goldman and J.P. Morgan for the roles of CIO and President.
Russell Investments, owned by private equity firms TA Associates and Reverence Capital Partners, has hired a new global chief investment officer as well as president, marking the second time in three years that the firm has shuffled its senior leadership team.
The investment services and outsourced CIO firm has tapped Goldman Sachs's Kate El-Hillow as global CIO and J.P. Morgan mutual fund trustee Kevin Klingert as president.
Pete Gunning, who stepped in as Russell’s CIO in October 2018 after Jeff Hussey left the firm, will stay on in a newly created role as vice chairman and strategic relationships officer. Gunning had been CIO before Hussey's five-year tenure in the post.
“Pete has spent a quarter of a century with Russell Investments,” said Michelle Seitz, chief executive officer of Russell. Seitz added that this had been Gunning’s second tour as the firm’s CIO and that this next role will allow him to “leverage his tenured experience” at Russell. “This was a very natural evolution for Pete.”
Klingert will succeed Rick Smirl, who joined Russell in 2018 as chief operating officer. Smirl is leaving to join Virtus Investment Partners, a multi-boutique manager, as executive v.p. and COO.
El-Hillow Has Been In the OCIO Business Before
El-Hillow spent 17 years at Goldman Sachs Asset Management’s multi-asset solutions business, where she was most recently deputy chief investment officer. Prior to that, she was a senior portfolio manager for OCIO portfolios and head of portfolio management and trading.
“It’s hard to find senior investment executives that are as steeped in investment solutions as Kate is,” said Seitz.
Before joining GSAM, El-Hillow spent eight years at J.P. Morgan in its asset allocation business, holding dual roles as a client portfolio manager and chief operating officer.
Klingert, meanwhile, was most recently an independent trustee for J.P. Morgan Asset Management’s Six Circle Funds, according to his LinkedIn profile. Prior to this work, he spent 10 years at Morgan Stanley Investment Management, where he held various leadership roles including COO, acting CIO of fixed income, and head of liquidity and managed futures.
Before Morgan Stanley, Klingert spent 15 years a BlackRock, where he launched its tax-exempt fixed-income business in 1991.
“Kevin too is a very seasoned broad executive in his own right as it pertains to the infrastructure of running a global firm,” Seitz said.
With Private Equity Owners, Russell’s Future Is Always Under Scrutiny
Russell, an 85-year-old firm bought by private equity firms TA Associates and Reverence Capital Partners in 2016, was rumored to be up for sale in 2019. No acquisition has come to fruition, and when asked at the time, Seitz said that the firm’s plan is to focus on doing the best work it can.
“It speaks volume to the board’s and the owner's enthusiasm to make these investments,” Seitz said of the new hires. “We are running the best business we possibly can. What happens ultimately with the ownership will be a byproduct of success.”
However, in late March, Hamilton Lane purchased a $90 million stake in the business. The two struck a strategic partnership, which will give Russell’s clients access to Hamilton Lane’s research and technology, among other offerings, Institutional Investor previously reported.
Seitz said that the firm has plenty of run room in front of it. Only a quarter of asset owners with less than $10 billion in assets under management have outsourced their work. Russell already has a strong foothold in the healthcare and hospital market, and is looking to expand into the middle-market corporate pension plan space, Seitz said.
“We do believe that there are opportunities for us to be extensions of those staffs or for them to consider outsourcing those capabilities,” said Seitz.