Oklahoma Teachers Taps First CIO in Six Years

Kirk Stebbins, formerly at the City of Austin Employees’ Retirement System, has been hired to fill the long-vacant position at the $13.7 billion fund.

Kirk StebbinsThe Oklahoma Teachers’ Retirement System (OTRS) has hired a CIO, filling a position left vacant for the last six years.

The $13.7 billion fund selected Kirk Stebbins, former CIO of the City of Austin Employees’ Retirement System, after a national search conducted by EFL & Associates.

The new investment chief started his position on September 28, Executive Director Tom Spencer confirmed. Stebbins is reporting directly to Spencer.

“Kirk Stebbins brings 16 years of experience as a CIO in the public and nonprofit sectors to OTRS,” the executive director said in a statement. “He has one of the finest analytical minds on investment issues I’ve ever seen, and his integrity is above reproach.”

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According to Spencer, Stebbins’ responsibilities include recommending changes in investment policy, monitoring compliance issues, and overseeing in-house investment managers, consultants, and fees.

He is also tasked with educating the board of trustees on investments, and conducting independent market research.

According to fund documents, Oklahoma Teachers’ gained 22.4% for the fiscal year 2014. The pension plan surpassed its benchmarks over the three- and five-year periods ending June 30, 2014, returning 13.6% and 16.1%, respectively.

Stebbins called the opportunity to lead Oklahoma Teachers’ “a professional challenge I could not pass up.”

Prior to spending seven years with Austin’s city pension, Stebbins served as CIO of the Oklahoma Public Employees’ Retirement System. He was also director of investments for the Boy Scouts of America and a consultant at Mercer.

The new CIO holds a master’s degree in finance from Texas A&M University and a bachelor’s degree from Louisiana Tech University.

Investors are increasingly aware of environmental, social, and governance (ESG) issues—but that doesn’t mean they’re changing their ways anytime soon.

A new survey by Hermes Investment Management found that 90% of respondents believed fund managers should price in corporate governance risks as a core part of their investment analysis.

Despite this show of ESG awareness, 47% still said pension funds should focus exclusively on maximizing retirement incomes—a goal the majority believed would not be met by focusing on ESG issues.

Just 46% believed ESG-focused investing would produce better long-term returns.

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Additionally, while 79% considered significant ESG risks with financial implications as sufficient reasons to reject an otherwise attractive investment, 58% believed the number of opportunities rejected by pension schemes because of ESG will increase only slightly over the next five years.

“It is clear that ESG has become mainstream,” said Hermes Chief Executive Saker Nusseibeh. “However, the industry’s obsessive focus on measurement leads naturally to more short-term thinking and decisions that often miss the whole point of investment.”

The growing trend toward passive investing strategies may also mean that investors are less engaged in where money is actually going. According to the report, 61% of respondents believed large shareholders are likely to become unaware of the companies they invest in.

“By moving toward index-tracking strategies, investors are giving up their voting rights, and thus, their influence,” Nusseibeh said.

The CEO added that even though institutional investors are beginning to talk the ESG talk, there is a “long road to walk before we see real change.”

“Today’s siloed and short-term investment approach is the antithesis of responsible capitalism,” Nusseibeh said. “Change is necessary, if we are to ensure today’s savers and their children will be able to enjoy a fruitful world in the future.”