Home > News > Newsmakers > Breaking News: Chaudhari Leaves IBM for General Electric CIO Job

NewsmakersSeptember 24, 2019

Breaking News: Chaudhari Leaves IBM for General Electric CIO Job

Noted financial helmsman, who improved Big Blue’s pension fully funded status, now tackles underfunded GE plans.

Art by Tim Bower

Harshal Chaudhari, the one-time chief investment officer at IBM, has switched over to be CIO at General Electric, where he faces a bigger challenge. Reason: GE’s defined benefit pension plan is underfunded, and IBM’s is fully funded.

A former software engineer and PwC consultant, Chaudhari became International Business Machine’s CIO in 2016. He took the DB plan to more than 100% funded during his tenure, and oversaw a major campaign to de-risk the portfolio.

At GE, its several DB plans totaled $69.4 billion in fair market value as of year-end 2018, which amounts to 75% funded, according to the company’s financial filing. Overall, the company contributed $6.3 billion last year to shore up the pension program, up from $2.9 billion the year before.

In his new job, Chaudhari will oversee the defined contribution program, as well. As GE’s CIO for global pensions, he also carries the title of deputy treasurer and reports to the company’s treasurer, Jennifer VanBelle.

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Chaudhari’s appointment comes after new CEO Larry Culp, who took over in fall 2018, made a major step to revamp its financial operations, replacing GE’s chief financial officer in July. Culp succeeded John Flannery, who was forced out after the conglomerate failed to meet financial targets.

At IBM, Chaudhari recently left the CIO’s position to head its artificial intelligence unit and lead its Enterprise Analytics organization. For his work as Big Blue’s investment chief, he last year won an Innovation Award from CIO for corporate DB plans above $15 billion.

He focused on liability-driven investing to hedge the IBM portfolio’s risks and also to enhance its return-seeking abilities. One initiative has been to overhaul the fixed-income portfolio, reducing the reliance on traditional corporate credit.

Harshal Chaudhari 2018 Innovation Awards Profile

Interrogation: Harshal Chaudhari

Tags: Defined benefit (db) pension plans, GE, Harshal Chaudhari, IBM, Larry Culp

Home > News > Regulation > MIT Endowment Returns 8.8% in 2019, Grows to $17.4 Billion

Regulation September 24, 2019

MIT Endowment Returns 8.8% in 2019, Grows to $17.4 Billion

University addresses Epstein protests, launches internal review of donor relationships.

By Michael Katz

The Massachusetts Institute of Technology Investment Management Company (MITIMCo) reported that the university’s unitized pool of endowment and other MIT funds returned 8.8% during the fiscal year ending June 30, raising its total asset value to $17.4 billion, excluding pledges, from $16.4 billion at the same time last year.

It is the second straight year the endowment produced lower returns than the previous year. The endowmentreturned 13.5% in 2018 and 14.3% in 2017.

MIT’s annual report does shed some light on how the endowment is responding to pressure. MIT Treasurer Israel Ruiz also wrote that MITIMCo is “beginning to calibrate our budget for the impact of new federal tax laws,” including the anticipated reduction in investment revenue as a result of the 1.4% excise tax on net investment income, also known as the Endowment Tax. Additional budget needs are likely to drive more yield seeking in the endowment portfolio.

The school is also working to address recent protests by MIT students over donations accepted by the university from Jeffrey Epstein, the financier who had been arrested for sex trafficking before committing suicide in prison in August.

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At a recent faculty meeting, MIT President L Rafael Reif said, “I understand that I have let you down and damaged your trust in me, and that our actions have injured both the Institute’s reputation and the fabric of our community. I made mistakes of judgment. I take responsibility for those errors. And I hope to take responsibility for the work that must begin now: repairing the damage and rebuilding trust.”

The university has launched an internal review of how it assesses donor relationships and gift agreements, and Reif said an outside law firm, Goodwin Procter, is “fully engaged in its fact-finding” of the review.