Johnson & Johnson Picks Pension CIO | Chief Investment Officer

Johnson & Johnson has appointed an Exelon investment director to lead its pension fund, CIO has learned.

Neil Roache, formerly director of investment strategy and public markets at Exelon, has been named CIO of the $22.3 billion corporate plan, Johnson & Johnson confirmed Monday.

Prior to joining Exelon, Roache had served in a public markets role at UPS.

Exelon CIO Doug Brown said Roache will be missed, but he will do a “great job” at Johnson & Johnson.

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news. 

“Neil made a tremendous contribution to the success of the Exelon investment program,” Brown told CIO. “Personally, I am very happy for Neil as he has earned the opportunity to be a CIO.”

Johnson & Johnson ranks among the 20 public US corporations with the largest pension liabilities worldwide. As of fiscal year 2015, the fund had invested 79% in stocks and 21% in fixed income.

Existing rules are enough for managers to cope with the current liquidity situation, according to a joint report from the International Capital Market Association (ICMA) and the European Fund and Asset Management Association (EFAMA).

Requirements included in two pieces of European legislation create a “robust liquidity management framework” for the continent’s fund managers, the report stated.

“It is clear that the existing EU regulations and tools available in most European jurisdictions prove both comprehensive and appropriate for liquidity management.”Fixed income assets have become less tradable since the financial crisis as stringent capital requirements on banks have caused many to cease their market-making activities.

This development could hurt more than just bond fund managers, commentators have warned: An analysis by AllianceBernstein last year indicated that risk parity strategies could incur heavy losses if a major selloff occurs.

Want the latest institutional investment industry news and insights? Sign up for CIO newsletters. 

However, ICMA and EFAMA argued that both the Alternative Investment Fund Management Directive (AIFMD) and the Undertaking for Collective Investments in Transferable Securities (UCITS) contain sufficient provisions for liquidity management.

The AIFMD requires managers to conduct regular stress tests to ascertain their portfolios’ resistance to a liquidity crisis. UCITS rules require managers to “formulate forecasts and perform analyses” for new investments in order to understand each new holding’s contribution to “portfolio composition, liquidity, and risk and reward profile.” Stress tests and scenario analyses are also required.

In addition to prescribed liquidity management processes, ICMA and EFAMA said there were several “non-legislative” options for asset managers to ensure their portfolios did not become untradeable. These include redemption fees, temporary restrictions on redemptions, and “in-kind” redemptions. The latter allows large investors to redeem assets rather than cash, removing the need to trade.

“Through documenting the currently available requirements and tools it is clear that the existing EU regulations and tools available in most European jurisdictions prove both comprehensive and appropriate for liquidity management in both normal and exceptional circumstances and were positively tested throughout various market conditions,” the report said.

The two associations encouraged managers to make greater use of extra tools and data outside of the rules prescribed by regulators.