Exclusive: After More Than a Year of Searching, Connecticut Has Found Its New Chief Investment Officer

New York MTA's first CIO Sean Crawford to take the helm.


Sean Crawford, CIO, Connecticut
Retirement Plans & Trust Funds

After more than a yearlong search, Connecticut has found its chief investment officer. Sean Crawford, CIO of New York’s Metropolitan Transportation Authority (MTA), will take the helm on May 14.

He’ll have his hands full.
The $34.4 billion Connecticut Retirement Plans & Trust Funds (CRPTF) consists of six state pension funds and nine state trust funds.

CIO Deborah Spalding resigned in February 2017 to become a managing director at Connecticut-based Commonfund, which manages $24.3 billion in assets. Since then, Deputy CIO Laurie Martin, who joined in October 2016—four months prior to Spalding’s departure—has been interim CIO.

Connecticut has been considering strategies to shore up its 55.9% funded teacher’s retirement plan, while it measures impact investing issues such as gun divestment for its plans. 

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In May 2017, Moody’s reported Connecticut has the highest debt service costs of the 50 US states, although it declined to 13.3% from 14.3% in the previous year. Its net-tax supported debt (NTSD) is $6,505 compared to the median per capita of $1,006.

Despite the challenges, the CRPTF posted a net investment record return of 14.2% for the fiscal year. The overall portfolio grew by over $3 billion in value during the year.

Connecticut Treasurer Denise L. Nappier credited CRPTF’s robust performance to Martin, who helped to build the investment team and oversaw extensive due diligence during her 18 months  at the fund, which led to commitments totaling $1 billion. With Crawford and Martin at the helm, Nappier said the team “is well-positioned to strengthen overall pension fund operations and continue our course toward maximizing long-term performance while guarding against undue risk.”

Crawford is accustomed to forging new frontiers. Three and a half years ago, he became the first CIO of the New York MTA, which operates the largest transportation network in North America. He was responsible for the management, asset allocation, and investment selection of the MTA’s defined contribution (401(k)/457), defined benefit (pensions), health and welfare (OPEB), and insurance assets, with assets under management in excess of $15 billion.

Prior to the MTA, he was a vice president of the financial services firm Brown Brothers Harriman, a director at Barclays, and a vice president at Lehman Brothers. He has 21 years of investment and research experience.

His last day at the MTA was Friday, May 4, and he will begin in Hartford on May 14. 

“I am very pleased to be joining Treasurer Nappier’s team and to be working with the talented and dedicated professionals serving the people of the State of Connecticut. I look forward to assisting the Treasurer and the IAC in prudently and sustainably managing the investment programs. The challenging investment environment will require diligence, persistence, and patience as we strive to fulfill the commitments of the pension and the trust funds,” Crawford said in a statement.

Crawford will speak on the “Macro Investing and Political Risk” panel at CIO’s Chief Investment Officer Summit on Thursday, May 10.

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A.G. Beshear Gets Witness Thrown Out in Kentucky Pension Case

Republican Gov. Bevin attacks judge as a biased Democrat.

Andy Beshear, Democratic attorney general of Kentucky, was awarded another court victory in his ongoing pension lawsuit against GOP Gov. Matt Bevin, by getting a witness knocked out in the case.  

The governor responded by calling the judge politically biased against him.

Beshear’s legal team filed a protective order against Bevin’s administration to stop it from taking Beshear’s depositions reports WKYT. Beshear’s lawyers objected to Bevin’s lone witness for the case—an attorney who works for him.  Backed by the Kentucky Education Association and the Fraternal Order of Police, Beshear’s office said that this would deem the witness as inappropriate, as a conflict of interest.

When Judge Phillip Shepherd of the Franklin County Circuit Court granted the motion in Beshear’s favor, he reiterated his goals of keeping the case on the “legal issues.”

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Bevin’s team said that the ruling deprives his team of their right to collect information and evidence for their argument. Steve Pitt, Bevin’s attorney, said that while legal issues sound great, they “are often defined by the facts of the case, and here, the facts of the case are very much an issue.”

The governor labeled the judge’s decision as political. He called Shepherd “the most incompetent hack of a judge” in an interview on 55KRC Radio in Cincinnati. “This guy’s a former Democrat operative. He used to be in a previous Democrat administration as an appointee. Now he happens to be a—quote, unquote—judge,” he said in the interview, reported by the Courier Journal.

At the center of the court dispute is a pension reform bill that aims to shore up the worst-funded state’s $40 billion shortfall by cutting teacher benefits and changing the pension plan for new hires. Beshear says the bill itself is illegal as it violates the state constitution, and he decries the way it was passed.  Bevin inserted the reform measure into a sewage bill late in the 2018 legislative session. The bill was then passed the next day without legislative review or public comment.

Beshear issued a statement where he touted the victory and also announced a website which tracks the entire legal procedure from both sides. The site, ag.ky.gov/pensionbill has a full timeline as well as links to Beshear and Bevin’s filings to keep the public informed of the full procedure.

Last month, Judge Shepherd awarded Beshear his first victory in the case when he ruled against the governor’s bid to disqualify the attorney general. Bevin noted that Beshear advised lawmakers on the pension measure and then sued when they ignored his advice.. The governor argued that doing both things was unethical, but Shepherd felt otherwise, allowing Beshear to carry on with the lawsuit.

Bevin’s main response to all allegations is due May 23, with Beshear’s retort due May 30. An oral argument will be held in the Franklin County Circuit Court on June 7.

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