CalSTRS to Hold CIO Interviews Next Week | Chief Investment Officer

The California State Teachers’ Retirement System’s search committee will meet in closed session on April 11 and begin interviewing candidates for the CIO role, according to the pension fund’s board meeting agenda.

CalSTRS began its search for a new CIO earlier this year, following the announcement that longtime CIO Chris Ailman will retire on June 30 after more than 20 years as the fund’s CIO. Ailman will remain as an adviser to the new CIO until the end of 2024.

According to a CalSTRS spokesperson, this will be the first round of interviews, and the full board will conduct an additional round of interviews with finalists in late April or early May. According to the spokesperson, the board expects to select its new CIO before July.

CalSTRS manages $331.4 billion in assets, as of February 29, and is the second-largest public pension fund in the U.S., behind only to California Public Employees’ Retirement System, which recently announced its new CIO, Stephen Gilmore, after a search that began in October 2023.

According to the job posting for the position, CalSTRS seeks a candidate with a minimum of 10 years of experience in investment management, a track record of successful asset allocation, and a track record of creating and executing long-term investment plans that align with an organization’s strategic goals and objectives. The salary range for the CIO role is listed from $408,000 to $612,000, with a maximum of a 200% performance based bonus.

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Tags: California Teachers’ Retirement System, CalSTRS, Chris Ailman

The California Public Employees’ Retirement System, the largest pension fund in the U.S. with $494.6 billion in assets, has selected Stephen Gilmore as its new CIO, succeeding Nicole Musicco, who stepped down in September 2023.

Gilmore’s appointment is effective in July, the CalPERS board announced Tuesday. He will become CalPERS’ fourth CIO in slightly more than five years, succeeding Nicole Musicco, Ben Meng and Ted Eliopoulos.

“Stephen has worked in very public roles during his career for organizations where transparency and resiliency are essential,” said CalPERS CEO Marcie Frost in a statement. “He brings not only a wealth of investing knowledge to the job, but he also has the temperament to understand the needs of our members and public sector employers who depend on CalPERS to be a steady, long-term partner.”

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Gilmore, who is a member of the CIO Power 100 list of the world’s leading asset allocators, will be leaving his role as CIO of the Guardians of New Zealand Superannuation, which manages the New Zealand Superannuation Fund, a position he has held since 2019. A native of New Zealand, he was previously chief investment strategist at the Future Fund, the sovereign wealth fund of Australia, and has held roles with the International Monetary Fund and several banks, including Morgan Stanley, Chase Manhattan and the Bank of New Zealand.

CalPERS and the role of CIO at the fund has often been referred to as highly political, in which the incumbent must navigate entanglements with the state legislature and a 13-person board of member-elected and political appointees. Comparatively, strong governance is a major belief of NZ Super, which on its website says that “clear governance and decision-making structures that promote efficiency and accountability are effective and add value to the fund.”

As of February 29, NZ Super, the sovereign wealth fund of New Zealand, which manages NZ$73 billion ($43.53 billion), returned 9.27% over the past five years, roughly corresponding with Gilmore’s tenure. In the past 12 months, the fund has returned 16.04%.

As of June 30, CalPERS had one- and five-year annualized returns of 5.8% and 7.1%, respectively, according to CalPERS’ most recent fiscal year report.

NZ Super holds 43% of its portfolio in global equities, 24% in debt securities, 10% in alternatives, 5% in rural and timber, 4% in New Zealand equities, 4% in private equity, 4% in infrastructure and 4% in property.

Comparatively, CalPERS allocates 45.5% of its portfolio to global equity, 26.1% to fixed income, 13.7% to real assets, 14.3% to private equity, 3.5% to private debt and 3.2% to other asset classes, as of February 29.

“Stephen has made a significant contribution to the sophistication of the NZ Super Fund since he joined us in early 2019, a period during which the Fund has grown by more than $30 billion, nearly doubling in size.” said Paula Steed, NZ Super’s CEO, in a statement. “He has championed the role of new technology in enabling better investment decision-making, brought innovative and disciplined thinking to our investment processes and, as Chair of our responsible investment strategy refresh, has been key to our shift towards a sustainable investment approach. These enduring changes have helped to position us well to manage the ongoing growth in the Fund.”

CalPERS began its search for a new CIO in October 2023, hiring executive search firm Dore Partnership to lead the process. The fund held a first round of interviews in January and a second round in February. According to a published report, there were four finalist candidates, all from outside the organization.

Gilmore’s annual salary, according to CalPERS’ press release, will be $718,750, not including performance bonuses.

Gilmore holds a Bachelor of Commerce and a Master of Commerce in economics from the University of Canterbury in Christchurch, New Zealand.