“Adrian joined our investment team in 2020, bringing with him a breadth of experience that included time on Wall Street (at Goldman Sachs during the financial crisis), a law degree (University of Michigan JD ’13), early-stage venture experience (Invest Detroit) and as an allocator focused on private markets (UAW Trust). We knew we were hiring an incredibly versatile and talented investor, so it seemed fitting that we present Adrian with a new challenge when he joined: overseeing our hedge fund portfolio.
“Adrian completed a full strategy review of the asset class, including the repositioning of the portfolio to ensure greater resilience to a variety of market environments. Little did he know that this work would be put to the test so early in his tenure, but as both stock and bond markets fell in 2022, the hedge fund portfolio earned a remarkable 10.9% in 2022. Rather than rest on this success, Adrian has continued to analyze and fine-tune our strategy, most recently leading a comprehensive review of systematic trend-following strategies.
“On investment talent alone, Adrian will become a highly successful CIO. But what makes him an even better leader is his selflessness and empathy. Adrian always puts the team first, whether it involves volunteering to cover a meeting or accepting a thankless assignment. On top of that, he displays a rare ability to connect and share the feelings of his teammates, raising morale when the team needs a boost or quietly listening when a co-worker simply needs a friendly ear.
“Adrian has been a tremendous addition to our team, and I am enormously thankful for all his contributions to date. Soon enough, however, he will be leading his own team as a CIO. I look forward to watching his success and strongly recommend him as a Next Gen CIO.”
—John Barker, Vice President and CIO, The Kresge Foundation
The CIO Editorial Team shared a dozen questions with all our NextGen nominees and asked them each to pick six to answer. Their answers informed our decision to include them as a NextGen. Below are answers to seven of them from Adrian Ohmer.
CIO: What is the best way to bring more diversity to the financial industry?
Ohmer: Conscious continual effort and accountability. I’ve long been over the “pipeline problem” as an excuse, as the systemic issues that need to be solved to fix the pipeline problem are significant (and worthy of solving). That said, if an allocator or asset manager uses that line, it means to me they are not willing to do conscious continual work required and set accountability metrics. How one sets targets has to be bespoke to their institution, and the work of doing that is tough. But ultimately, having these conversations, no matter how tough they might be, is of immense value for your portfolio, team and career. There are great organizations that can give guidance no matter where one is in the journey, organizations like ILPA.
CIO: What roles do AI and large language models have in the future of institutional investing?
Ohmer: I see a very real path that AI and other large language models can be the next Bloomberg of our industry. That said, the question becomes whether currently existing service providers and tools harness this power to make their tools even better for users or if there’s some truly disruptive new entry into our market. At present, I’m listening most closely to our quant managers and how they see the evolution of this technology. “Will it replace allocators?” seems to be the question that underpins a lot of discussion today. My answer is, “No;” there’s always room for a human element to everything we do.
CIO: Which component of ESG-driven investing do you think will have the most influence on institutional investing going forward, and why?
Ohmer: I think each element—the E, the S and the G—will be fundamental contributors to a more holistic and enhanced way we invest going forward. I think the continued emphasis on labeling something as ESG-driven investing doesn’t do any favors to the importance of ESG and the importance of good investing. When I break down what ESG-driven investing really means to me, it is mostly about a fuller understanding of the risks present in any investment over the timeframe in which one is investing. To me, that is just good investing. I think the decoupling that needs to happen is that some risks in ESG space are outside the investment time horizon of any one investor, and maybe this is truly an exercise in better capital alignment with certain investments versus a new type of investing altogether.
CIO: What traditional and/or alternative asset classes do you think are most important for institutional investors, and why?
Ohmer: In the last few years, we have been reminded of the crucial importance of liquid asset classes, particularly public equity. Over a 10-year period, it was hard for many to stay committed to the space in the same allocation targets as they had prior to the Global Financial Crisis—the risk/return equation favored private asset classes, inflation was low, and there was virtually no risk-free yield. Coming out of the pandemic, many investors have been reminded why public equities are so important: liquidity in order to fund necessary operations, especially for closed-end foundations like Kresge.
CIO: What asset class or investment troubles you most right now, and why?
Ohmer: Private credit. Yes, the contours of post-GFC regulation make a ton of sense as to why the asset class exists and ought to grow. And the economics are attractive, no doubt. But the continuous flood of capital into the asset class since COVID-19 at least gives me some pause. What is capital deployment discipline? How does an allocator make sense of all the new firm launches in the asset class? Who actually has experience doing workouts and handling tough situations? These are the questions I’m wrestling with as I canvas the space and refine our strategy for the asset class here at Kresge.
CIO: What investing decision have you made for your organization that you’re most proud of?
Ohmer: Leading our investment into a private reinsurer. I spent years thinking about the evolution of climate change, what ESG means for investors and how to invest in that intersection. Through the course of many conversations, I came to the world of reinsurance and learned of its critical role in our global economy. It so happened I came to the space after years of poor returns due to a flood of capital entering the space in 2017 and heavy catastrophe years. But, barring some massive major disruption to reinsurance, it seemed to me the problems were in capital management and better models, not a fundamental break in the asset class. So with the support of my investment leadership, I was able to invest in a private, natural-catastrophe reinsurer that has proven to be a great partner to date.
CIO: What new skills do you think allocators need to be leaders in the field in the coming decade?
Ohmer: Identifying, hiring and retaining more diverse staff, and I mean diversity in every way. Growing geopolitical tensions in the world require allocators to have a better understanding of different world events, which an MBA or CFA doesn’t teach, per se. How many people on allocator staffs have degrees outside of an MBA or a CFA? How many have studied geopolitics or have worked in the field? How many understand global trade both academically and via some type of practice in the field? In my experience, when I look around at my peers and my seniors, I’m looking at people cut from a very similar cloth, regardless of race, gender or any other metric. And those of us who have different backgrounds oftentimes mute that to blend in with the allocator and asset manager zeitgeist.
