CIO Announces Consultant of the Year Finalists

CIO has announced its finalists for Consultant of the Year, a special category announced during CIO’s Innovation Awards, which honor leading asset owners and asset managers. The eighth annual gala will be held at the New York Public Library on December 7, following CIO’s Influential Investors forum.

Nominations for Consultant of the Year were made by a network of their peers, who represent more than $1.2 trillion in assets under management. We also asked our chief investment officer readers which consultants had honestly offered them something of true value that fit their investment needs over the long term.

Finalists were selected following a two-month nomination period, which produced hundreds of entries. Our shortlist was finalized by the CIO editorial team and our advisory board of asset owners: Jagdeep Singh Bachher of University of California, Tim Barrett of Texas Tech University System, Robert Hunkeler of International Paper, Jacque Millard of Intermountain Healthcare, Mark Schmid of the University of Chicago, and Robert “Vince” Smith of the New Mexico State Investment Council.

The finalists are:

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Christopher Levell, partner, client strategy, NEPC

Levell began his consulting career in 1987, and joined NEPC in 2005 as the firm’s first senior actuarial hire. With his background as an actuary, Levell helps clients with strategic decisions on the coordination of asset allocation with plan design, contributions, and financial statements. He has assisted clients, including the state of Wisconsin, on more than 250 asset-liability studies. He led the development of risk budgeting, scenario forecasting, and liquidity analysis at NEPC.

Prior to joining NEPC, Levell was a principal with Mercer Investment Consulting, serving as a lead consultant as well as an asset-liability project consultant. In 1997, he was charged with developing Mercer’s US asset-liability modeling capability. Levell holds a bachelor’s degree in actuarial science from the University of Illinois at Urbana-Champaign, is an Associate of the Society of Actuaries, and a Fellow of the Conference of Actuaries. In addition, he holds the Chartered Financial Analyst (CFA) and Chartered Alternative Investment Analyst (CAIA) designations, and is a member of the Boston Security Analysts Society.

Brett Minarik, senior portfolio advisor, Aksia

Minarik’s primarily role involves working with some 14 institutional investors, including Pennsylvania Public School Employees’ Retirement System in Harrisburg, advising them on the management of their hedge fund programs and often acting as an extension of their internal staff. Upon joining Aksia in 2010, he quickly became a strong team member, able to pull together strategies and knowledge from Aksia’s research specialists and various subject-matter experts. Whether projects involve structured credit, fundamental equity, quant equity, or developed markets macro, Minarik routinely works with clients to ensure the disparate pieces of an alternatives portfolio fit together to achieve each client’s unique goals.

Minarik also helped to develop Aksia’s client-facing research platform, often basing the tools, features, and outputs on the projects and special requests completed for clients over the years. Prior to joining Aksia, he was the client service manager for the boutique firm Carlsbad Wealth Advisory Group. He holds a bachelor’s degree in business administration from the George Argyros School of Business at Chapman University.

Rich Nuzum, wealth leader, growth markets region, Mercer

Nuzum is responsible for building Mercer’s wealth business in Africa, Asia, Latin America, and the Middle East. Using acumen acquired from 25 years at Mercer, including living and working 11 years in Asia, Nuzum matches projects in emerging markets to investors. Earlier in his career, Nuzum helped launch Mercer Investments in Asia during the 1990s, and was an early proponent of licensing Mercer’s global manager research to large institutional investors with in-house staff through MercerInsight, which now has more than 150 subscribers representing more than $6 trillion in assets. Nuzum led the launch of MercerFundWatch.com, and earlier in his career, also helped launch Mercer’s Dynamic De-Risking Solution and Pension Risk Exchange. He was asked in 2008 to lead Mercer’s OCIO business globally, which has grown from $20 billion AUDM when Nuzum took the helm, to more than $213 billion today.

Nuzum has an MBA from the University of Chicago Booth School of Business, studied international economics under a Monbusho Fellowship at the University of Tokyo, and holds a bachelor’s degree in Mathematical Economic Analysis from Rice University.

Neil Rue, managing director, Pension Consulting Alliance

Rue joined Pension Consulting Alliance in 1991, and is the lead consultant to several large state and municipal funds. He assists in consulting to several of the largest state pension funds in the United States, including Hawaii ERS, CalSTRS, Washington SIB, and Minnesota SBI, among others. Over the past several years, Rue has been instrumental in introducing PCA’s clients to purpose-driven/risk-oriented policy concepts, developing the Crisis Risk Offset concept, and implementing options-based investment strategies.

Rue has 29 years in the investment consulting business, and prior to PCA, spent seven years at the Frank Russell Company (now Russell Investments) in several product development and research-oriented capacities. He is a Chartered Financial Analyst, and received his bachelor’s and MBA degrees from the University of Washington.

The goal of the CIO Innovation Awards is to highlight the truly innovative approaches to asset owning and asset management, separating the merely different from the meaningful. As a result, over the past seven years, CIO has honored an ever-growing list of the world’s most innovative thinkers on both sides of the business.

Tags: Aksia, CIO, Consultant, Consultant of the Year, Industry Innovation Awards, Mercer, NEPC, PCA

For Ivy League endowments, fiscal 2017 was an atypical year, as underperformers outperformed, and the outperformers disappointed, according to investment research firm Markov Processes International (MPI).

“It was definitely an interesting year as far as asset allocation and the returns that the endowments got from asset classes,” said Sean Ryan, senior research analyst at MPI, in an interview with CIO. Ryan said the most surprising thing about 2017 was that a lot of the public markets heavily defeated the private investments.

“You see endowments like Cornell or University of Pennsylvania that are more geared toward public markets versus private investment as compared to Yale or Harvard,” said Ryan, “and they actually performed quite well.”

Despite the underperformance of private equity, Ryan said MPI data shows that Ivy League endowments are increasingly moving toward a higher risk/reward portfolio.

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“We looked at data from 2005 to 2017, and based off of our exposures, we‘ve seen increased movement toward private investment,” he said.

Brown and Cornell bucked their historical trends by outperforming Yale, Princeton, and Harvard. Over the past 11 fiscal years, either Brown, Cornell, or both were among the bottom two performers among Ivy League endowments.

Unlike fiscal year 2016, 2017 was a strong one for most endowments, according to the report, which said every Ivy League endowment, except Harvard, beat the 60% equities, 40% fixed-income portfolio. Only Columbia and Princeton have beaten the 60-40 portfolio on average over the past 10 years.

For 2017, all endowments reported returns that were well above their historical payouts of 5%, even when including 1.65% for inflation. Dartmouth was tops among its Ivy peers with a return of 14.60%, while University of Pennsylvania was a close second with 14.30%. The report said Harvard continued its six-year trend of performing at or near the bottom of the class with 8.10% returns in fiscal year 2017. Yale, which has been among the top three every year since 2011, delivered relatively mediocre returns of 11.30%.

The report said that rallying public equity markets boosted Ivy endowment returns during the year. It also said longer-term trends show that the Ivy endowments continue to increase exposures to illiquid investments, which is more like the Yale model of a high-risk, high-return portfolio.

Exposure to private equity was the largest contributor to aggregate endowment performance for the year, said MPI. Hedge funds, US equity, venture capital, real estate, foreign developed equity, and emerging markets also contributed positively to endowment performance. Natural Resources was the only major asset to contribute negatively to performance in fiscal year 2017.

All asset classes, except for bonds and cash, performed significantly better during 2017 than they did in 2016, according to MPI. The largest magnitude of difference was in foreign equities. Developed foreign equities returned 30.42% more in fiscal year 2017 than in fiscal year 2016, and emerging markets returned 35.81% more. Yale has the lowest exposure to these asset classes, and the three highest-performing endowments—Dartmouth, Pennsylvania, and Columbia—had the highest exposure.

Tags: Endowments, Fiscal 2017, Ivy League, performance

Ivy Endowments Have Topsy-Turvy Year in Fiscal 2017