2022 CIO of the Year

Medicine and art may seem far apart, but Jason Klein has managed money for both disciplines. For the past 15 years, he has served as CIO at Memorial Sloan Kettering Cancer Center, and before that, he performed the same role at the Museum of Modern Art.

He won the honor of CIO of the Year for 2022 at CIO’s Industry Innovation Awards gala on December 6, 2022. He also won the award for best among health care plans.

How did he move to medical care from the museum world? He has had a lifelong interest in keeping people healthy. He realized that he was “not cut out to be a doctor,” but was drawn to supporting a great hospital in another way—bolstering its finances. He was especially attracted to Memorial, as it is a world-renowned treatment center for cancer, “which robs people not only of health, but also frequently of life itself.”

Since he joined MSKCC in 2008 to form its investment office, Klein has expanded the facility’s endowment to $8.7 billion from $2.9 billion and logged a 10-year annual return of 10.3%, placing it in the top decile of endowments, per Cambridge Associates. Its funded ratio stands at 120%, up from 70% at the start of his tenure.

By Klein’s estimation, “As a risk-taking professional, you are best judged by your contingency plans, rather than your predictions.” Another Klein credo is that “no coin is so thin that it doesn’t have two sides.” Together, these insights help guide his team’s thinking and raise “our inclusiveness to accommodate perspectives and potentialities that we might otherwise overlook.”

Given that forward-looking approach, he prepared the portfolio for a possible inflation onslaught. In early 2021, when the Consumer Price Index was still below 2% annually, he added exposure to commodities, which are classic inflation hedges. The fund also built a double-digit cash position.

In early 2022, which turned out to be a rotten year for equities, Klein whittled down the fund’s stock position. Before that, in 2021, with big tech names flying high, he trimmed its tech holdings, a clever tactic, as tech’s rout last year showed. He also took out interest-rate hedges, a prescient move given the past year’s rate spiral. Also in early 2022, MSKCC established a strategic risk-reduction effort that came up with other stratagems focused on further reduced equity and equity-related exposures. 

MSKCC froze its pension program and pivoted to a liability-driven framework after years of pursuing a total return objective. In addition, Klein’s team started an endeavor to invest in cost-effective patient care, education and research to cure cancer—thus furthering MSKCC’s mission.

For long-term investments, he created a “capital sleeve” aimed at repaying long-term debt issuances. That’s in addition to the ordinary long-term pool that is an ongoing operational requirement of the organization. This collaborative effort “developed the governance necessary to balance liquidity objectives with investment opportunities,” he says.

—Larry Light