2023 Lifetime Achievement Award

Christopher Ailman is a giant among asset allocators. As part of the 2023 Industry Innovation Awards on December 5, Chief Investment Officer honored Ailman, the longtime CIO of the California State Teachers’ Retirement System, with a Lifetime Achievement Award in recognition of his many accomplishments.

A dynamic personality and deep thinker on economic and financial topics, he has established a strong record since joining CalSTRS, the nation’s second largest pension plan with assets most recently listed at $305 billion, in 2000. The fund has clocked a 10.1% annualized performance over the last three years, easily surpassing its 7% actuarial assumption.

Ailman has devoted his entire career to public pension programs. His tenure at CalSTRS came after years heading other public retirement plans, including the Sacramento County Employees Retirement System and the Washington State Investment Board.

Ailman is always looking for ways to boost returns by taking bold steps. For example, while public equity is the fund’s largest asset class, at 37%, Ailman intends to boost fixed income to 14% from 10% to take advantage of current elevated yields. Where once CalSTRS’ assets were overwhelmingly run by outside managers, Ailman has pushed to bring two-thirds of the money management in-house, an initiative called the collaborative model.

Like other pension funds, CalSTRS took a pasting in the global financial crisis of 2008 to 2009. But it has inched its way back and, as of mid-2022, stood at 74.4% funded. Its steady-as-she-goes strategy is to be fully funded by 2046.

Ask other CIOs, and they will regale you with how Ailman has reached out to them and offered advice and friendship. He has worked with peers on smart ways to deal with private equity firms, whose fees are often high, for instance.

As a well-known investing sage, appearing on television and as a public speaker, he stands out as an advocate for environmental, social and governance goals and for more diversity and inclusion in the financial industry. He set a goal to halve CalSTRS’ exposure to carbon emitters by 2030.

Perhaps his most prominent ESG initiative was to add CalSTRS’ weight to a 2021 campaign by an activist hedge fund, Engine No. 1, to change ExxonMobil’s board. CalSTRS’ example led two other pension giants, the California Public Employees’ Retirement System and the New York State Common Retirement Fund, to join in on the effort. The investor activism was a success: In 2021, they won three of four director seats they sought. Common practice for pension funds when they disagree with a portfolio company’s policies had been to ditch its shares. The change on the oil giant’s board was big news around the world.

Further back, in 2012, CalSTRS decried Facebook (now Meta Platforms) when it went public with an all-male board. In 2017, Ailman backed State Street Global Advisors when it pushed for more female board directors in corporate America.

Along with his efforts to promote fairness and good works nationwide, Ailman never loses sight of his primary mandate: California educators’ well-being. In a recent CNBC appearance, Ailman talked about how CalSTRS’ portfolio was “diversified and very complex.” But he also highlighted the transparency the plan strove for, to let its beneficiaries understand that CalSTRS was in good shape.

—Larry Light