2018 NextGen

“Jonathon has the rare ability to bring both macro and micro perspectives to his role in managing our organization’s pension portfolios. This allows him to function both as an effective portfolio manager for our real estate portfolio and as a valuable contributor to overall asset allocation decisions.”

-William Clark, Senior Vice President and CIO, Federal Reserve Office of Employee Benefits

With the ability to build programs and educate employees, Jonathon Eck is forging new ground at the 104-year-old Federal Reserve Office of Employee Benefits. Over the past four years, he has been developing the real estate investment program as the senior investment associate at $25 billion system.  He’s also in the process of introducing target date funds into defined contribution plans.

Eck is careful to acknowledge the potential disruption that technology can force into the market, and the affect it can have on portfolios.

Eck has a bachelor’s degree from Rensselaer Polytechnic Institute and an MBA from NYU. He began his career as an investment analyst at the Federal Reserve System in August 2005. 

CIO: What are the accomplishments you are most happy to have achieved recently, and why?

Eck: For the last four years, I have been fortunate to be one of two team members tasked with developing a real estate investment program for our defined benefit plan. Developing a program from scratch is unique, rewarding, and challenging. Sometimes the program feels like my third child. I also have spent significant time working with the communications team and our third-party financial education vendor to enhance our financial education program and promote financial wellness among the Fed’s employees. The thought that you can influence a program and, in turn, help people make better financial decisions that positively impact their future is rewarding in a way that is hard to describe.   

CIO: What would you be most excited to accomplish in the year ahead, and why?

Eck: One of the biggest and most impactful projects I am working on right now is the introduction of target date funds to our defined contribution plan, which we are set to launch mid-year. The amount of analysis, study, and diligence that went into designing and developing a custom product to benefit our participants leaves me feeling extremely proud from a plan sponsor prospective.

CIO: What’s the most rewarding aspect of being an asset owner?

Eck: Having the assets and not having to fundraise would be my most honest answer. Additionally, as an asset owner, I get to continue thinking and looking forward; it is like being part of an evolutionary process that keeps you feeling alive. There is never a time when you can say, “I have the perfect asset allocation strategy I need for the next several years, time for some rest and relaxation.”

CIO: What’s the most challenging?

Eck: It is difficult to be responsive to the large number of individuals who want to spend some time with me. I could devote all day listening to general partners and investment managers and reading pitch books. Optimizing my time learning about current opportunities and building my network, yet also getting my day-to-day work done, is a delicate balancing act.

CIO: What are you most hopeful about in the future of the industry?

Eck: As simple as it sounds, I hope the industry can deliver the financial outcomes that institutions and individuals expect and are going to require. Market returns will be what they will be, but if the industry can understand the goals and risk considerations of investors and create risk-controlled solutions that capture the market’s returns and deliver them to investors, the future could be considered a success.

CIO: What are you most cautious about?

Eck: I think the industry is going through a generational change along two fronts: (1) from defined benefit plans to defined contribution plans, and (2) the ownership of asset managers. These two changes have the potential for different kinds of disruption to the industry and require focus, diligence, and risk management by asset owners.

CIO: As a leader, what are the most important aspects of the industry you hope to change over your career?

Eck: By the time my career ends, if not sooner, I hope that we will be able to talk about diversity in the financial services industry as something that has been achieved. Taking steps to encourage inclusion from all candidates in the labor force is key. Valuing the diversity of views and backgrounds at all stages starting with mentoring, moving to internships, and continuing on through the hiring and promotion process should result in a much stronger industry.

CIO: If you had one piece of advice for your peers, what would it be?

Eck: I would say that we cannot be afraid of change; it is inevitable. Those who embrace change, understand it, and work to implement it effectively will be the most successful leaders in our industry.

CIO: What are the biggest current trends you are seeing that have surprised you?

Eck: The increasing speed of technological disruption is phenomenal and has outpaced all my expectations. Fintech has the opportunity to disrupt the status quo significantly and provide for better outcomes in the future in ways that that we cannot even predict. However, one needs to carefully consider the potential downside effects from disruption on the business models of each existing or potential investment in the portfolio.