London CIV Appoints Aoifinn Devitt as CIO

Aoifinn Devitt

London CIV, the asset pooling company for Local London Government Pension Scheme assets, announced it has hired Aoifinn Devitt as its new CIO, effective January 15. The fund manages 14.3 billion pounds ($18.26 billion) in assets, as of March 31, 2023.

“I’m delighted that Aoifinn is joining London CIV as CIO,” said Dean Bowden, London CIV’s CEO, in a statement. “Her extensive knowledge and experience, including within the LGPS arena, will add significant value to the investment proposition and business more broadly.”

Devitt is currently CIO of the Moneta Group, a U.S.-based wealth management and investment advisory firm. Previously, Devitt had been head of Ireland investment at Federated Hermes; CIO of the Policemen’s Annuity and Benefit Fund of Chicago; and a founder of alternatives research and consulting firm Clontarf Capital. Other roles have included investment banking at Goldman Sachs in London.

Devitt earned law degrees from both Trinity College Dublin and Oxford University, an MBA from INSEAD and a master of science degree in applied neuroscience from King’s College London.

Devitt also hosts and produces The Fiftyfaces Podcast, which showcases diversity and inclusion within the investments industry and other professions.

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“I’m thrilled to be joining Dean and the London CIV team as CIO, especially at a time of evolution and growth for London CIV,” Devitt said in a statement. “Having worked within the LGPS network for over 15 years, I am acutely aware of the importance of the role of London CIV in supporting our clients in the management of the LGPS.

I am excited to build upon my work within the public sector to develop a suite of investment products that reflects the evolving imperatives around net zero goals, cash flow generation and portfolio resilience, and above all to working with a diverse group of clients at such a momentous time in their trajectory.”

Devitt’s appointment comes after the U.K. Chancellor of the Exchequer Jeremy Hunt, of the governing Conservative Party, announced plans to prioritize pension and insurance company investment in U.K. assets, including private equity and infrastructure.

Tags: Aoifinn Devitt, CIO, Dean Bowden, London, London CIV

The CalSTRS board on Thursday adopted two changes to the pension fund’s Investment Policy Statement that would permit a broader use of leverage and widening of asset allocation bands, intended to build a more resilient portfolio.

The vote came during a California State Teachers’ Retirement System investment committee meeting in which CIO Chris Ailman announced his plans to retire at the end of June.

With Ailman retiring in the summer, this will mean that both CalSTRS and the California Public Employees Retirement System will be searching for a new CIO. CalPERS expects to announce the results of its search sometime early 2024, following the resignation of CIO Nicole Musicco in September.

The pension fund’s board approved a plan to increase the fund’s maximum usable leverage limit to 10%, allowing CalSTRS to temporarily borrow up to 10% of the fund’s assets for total fund portfolio positioning and liquidity management. This would allow the fund, which holds $317.8 billion in assets, to borrow up to $30 billion as leverage.

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“After independently evaluating the proposed policy, Meketa Investment Group concurs with Staff’s recommendation to adopt a modified IPS incorporating new target asset allocation bands and defining the leverage maximum allowance at 10%,” Meketa, CalSTRS’ investment consultant, stated in its review of CalSTRS plan.

According to the review, both CalSTRS staff and Meketa concluded that up to 10% leverage would pose minimal risk to the pension fund’s funded status, although it was noted in a report that there would still be other risks, such as counterparty risk, reputational risk, execution risk and maturity risk.

CalSTRS staff noted that it would not plan to immediately use the leverage, but it would have the option to use it in times of market downturns. The 10% limit would not necessarily mean the fund plans to borrow up to the limit.

In addition to the tools the fund already uses, the fund under this new policy will consider using commercial paper borrowing and unsecured term debt. CalSTRS currently uses derivatives, reverse repurchase agreements, and bank credit lines.

The fund has used leverage in the past to navigate such downturns. In 2020, the fund used derivative tools to mitigate weak equity markets and outperformed its target that year. Without the use of derivatives, the fund would not have been able to do so.

“Leverage is not new to CalSTRS, nor is it not new to large asset owners like [CalSTRS],” said Meketa co-CEO Stephen McCourt in Thursday’s meeting.

CalSTRS currently holds $12.306 billion, 4% of the fund’s assets, as gross leverage. Net leverage—gross leverage minus fund cash—stands at $4.747 billion, 1.6% of the portfolio.

Expanding strategic asset allocation ranges, combined with the 10% maximum leverage for total fund management, could lead to optimal portfolio implementation and risk management, according to CalSTRS’ recommendation cited in the meeting.

“Think of the analogy, we all use credit cards for short-term purchases and then pay them off just to smooth out our cash flow and this is the kind of thing we’re trying to do here, is take advantage of opportunities when we think they appear, and we are being very judicious and monitoring the heck out of it,” Ailman said of the policy change.