WSIB CIO Gary Bruebaker to Retire | Chief Investment Officer

After 18 years at the Washington State Investment Board, Bruebaker is trading building good investment returns for other passions such as water sports and vintage cars.

Gary Bruebaker

Washington State Investment Board Chief Investment Officer Gary Bruebaker is retiring at the end of 2019, after 40 years in the investment business, details a press release from the state investment organization.

Bruebaker has served as CIO for 18 years, joining WSIB in 2001. He was considered instrumental in building up the $104 billion pension plan’s private equity and real estate asset classes to almost 40% of the system’s assets under management, a figure that tops all major US pension plans.

Bruebaker also helped build WSIB’s unique approach to real estate investing. Its $18.6 billion real estate portfolio is in effect a direct investment program. WSIB partners with other firms around the world to manage the real estate assets but retains ownership stakes.

While other pension plans also have some direct ownership of real estate assets, it is almost always more limited. The WSIB is unique in that the direct investing is the only approach it uses in its real estate program.

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The press release said WSIB has hired executive recruiting firm Hendrick & Struggles and will use its associate, Lyndon Taylor, to conduct an industry-wide recruiting effort.

“Gary’s investment leadership is not something that anyone simply replaces,” said Theresa Whitmarsh, WSIB executive director, in a press release. “His balance of steadfast discipline, attention to detail, and yet openness to discussing new ideas, are qualities we want to reinvent in our next version of leadership.”

Bruebaker said in the press release his final day will be December 20, 2019, although he will remain available to the WSIB staff during early 2020 in support of transitioning to a new CIO.

Prior to joining the WSIB, Bruebaker served as the deputy state treasurer for the Oregon State Treasury. In that job, he developed and implemented policy, practices, and performance measures for the financial infrastructure of the State of Oregon. He also served as a member of the Oregon Short-Term Fund Board, the Oregon Municipal Debt Advisory Commission, and the Private Activity Bond Committee.

Bruebaker in the press release said he anticipates spending more time with his family along with some non-professional pursuits involving water sports, outdoor activities, and his passion for vintage cars.

“I’ve been honored to serve our retirement beneficiaries and other stakeholders of the WSIB,” said Bruebaker in a brief statement. “I truly am privileged to have worked for the past 18 years with what I consider the best investment board and the absolute best group of employees I could have imagined.”

It may not be easy filling Bruebaker’s shoes, given that the financial performance of the pension plan under his tenure. In the 2017-2018 fiscal year ending June 30, WSIB posted investment returns of 10.04%, net of fees, outpacing the returns of other large public pension plans in the US, shows data analyzed by CIO. The one-year numbers were not a fluke. WISB, for the 10-year period ending March 31, 2019, earned an average annual return of 10.5%, beating other large US pension plans.

Washington State Investment Board Commits More than $2 Billion to Private Equity

Tags: Gary Bruebaker, Pension, Retirement, Vintage Cars, Washington State Investment Board, Water Sports

Norway’s biggest pension fund is dumping alcohol and gambling companies from its $80 billion portfolio, continuing its push to divest from unethical equities otherwise known as “sin stocks” to invest responsibly on behalf of its 1 million-plus plan members.

Oslo’s Kommunal Landspensjonskasse, or KLP, will boot 90 companies in the two sectors, including brewers Anheuser Busch and Heineken, and the Malta-based online betting service Gaming Innovation Group. The two sin stock sectors comprise 1.6% of KLP’s equities portfolio, or $320 million.

Sverre Thornes, the fund’s chief executive officer, said the fund “regularly” questions the ethics of its investment decisions to stick to its responsibility-driven guidelines. “This is not just about what gives the highest return, but also about our investments contributing to positive and sustainable social development,” said Thornes.

Approximately 5% of the world’s deaths per year are alcohol-related, according to the World Health Organization. In Norway, alcohol is linked to more than half of its violence reports.

Thornes admitted that gambling and drinking can be fine in moderation. Addiction to these things, however, “have major negative consequences” for individuals and their loved ones, he said, as well as “great costs” for society.

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Alcohol absorbs more than $2 billion per year in costs from Norway alone.

“With these changes we want to invest the pension funds we manage in other businesses, which to a greater extent contribute to a safe and better world for everyone,” said Thornes.

The decision, which the plan said it consulted with members and shareowners before making, is similar to what other large pension plans, such as the New York Common Retirement Fund and the California State Teachers Retirement System, are doing by divesting stocks in oil, prisons, and gun companies.

Earlier in the month, the Norwegian fund removed $3.7 billion worth of companies involved in coal-based activities, an extension of its auctions in 2014, when it ditched firms that earn more than 50% of revenue from coal. Like its fellow environmental, social, and governance-oriented institutions, it prefers renewable energy, such as wind power.

KLP recently invested $100 million into a Copenhagen Infrastructure Partners-run renewable energy fund, joining fellow Nordic pension plans PensionDanmark, ATP, and Laegernes.

Thornes also said the pension plan does not and will not invest in pornography.

KLP returned 3.1% in the first quarter of 2019. It allocated to stocks (23.6%), bonds (46.7%), lending (12.1%), property (12.1%), and other financial assets (5.6%) as of March 31.

Another Swedish Pension Fund Makes Huge ESG-Focused Divestment

CalSTRS Investment Committee Was Split on Private Prison Divestment

Tags: Alcohol, Divestment, ESG, Gambling, KLP, Norway, Pension, Sin Stocks