Some people are so accomplished that they are known primarily by their first name. Mansco Perry III is one in that august company. As the head of the Minnesota State Board of Investment (SBI) for the past eight years, he has posted spectacular returns—and done so with telltale modesty. “This stuff isn’t rocket science,” said Perry, who in 2018 received our Lifetime Achievement Award. “It is pretty straightforward.”

The plan’s board mandates that the fund grow, and under stringent risk controls. Perry has facilitated this, and then some. For fiscal year 2021, ending this past June 30, the Minnesota program returned 30.3%—its biggest showing since 1983, when the organization posted a 40.3% jump. Since he took over, the portfolio has doubled, to $130 billion.

Perry’s plan has been ranked in the top 1% for the past decade, per the Wilshire Trust Universe Comparison Service (Wilshire TUCS). Maintaining a steady emphasis on cost efficiency, Perry has saved the state of Minnesota over $100 million in fees.

The plan, in Perry’s words, is equity-oriented—50% of assets under advisement (AUA) is in stocks, according to the most recent report. Before the 2008 global financial crisis, “we always thought that diversification would save us,” he said recently, observing that US Treasurys turned out to be the lone major asset class not to get slammed. Indeed, Perry has added to core fixed income, with half of it in Treasury paper.

“I keep it simple,” Perry said. In that spirit, he eschews hedge funds, whose maneuvers can be Byzantine. Private equity (PE), the hot area now for asset allocators, is the strongest performer for Minnesota SBI, up 49.4% for the past fiscal year. “You get better valuations” for PE, he noted. Plus, public equity can be “all over the board,” and, besides, the issuing companies “already have their money” from public offerings. With PE, the owners—meaning the partnerships that own bought-out businesses—have an incentive to make the portfolio companies work better, because they eventually will go on sale again, he reasoned.

For SBI’s US public equities, 80% is passively invested, Perry said; for international stocks, just half is in indexes. In all, the split is 70% in domestic stock, 30% in foreign. Some years, Perry pointed out, the stock market might drop 20%, the definition of a crash. But most of the time, he added, the market is up, and often by double digits. In just seven of the past 40 years have stocks been negative, he said. There is built-in flexibility when running a plan, he remarked: With portfolio holdings, one advantage is that, over a 30-year horizon, “you don’t have to be liquid every year.”

Perry recently announced that he would retire, though “I’ll probably stay through the end of the fiscal year.” He came to Minnesota to attend Carleton College after growing up in Newark, New Jersey. Neither of his parents graduated from high school. Along the way, he picked up an MBA from the University of Chicago and a law degree from Mitchell Hamline School of Law.

He had early financial jobs at the likes of retailer Dayton-Hudson (now Target), agriculture giant Cargill, and the Minnesota Federal Reserve. He went on to serve 18 years at Minnesota SBI as an assistant executive director, and also as CIO for Macalester College and the Maryland State Retirement and Pension System (MSRA). He returned to Minnesota SBI as chief in 2013 and thence proceeded to set the track on fire with his blazing performance.

“There’s nothing magical about it,” he said, with typical self-effacement.

—Larry Light