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Asset Management CultureApril 19, 2021

Tufts Names Craig Smith as Next CIO

The investing veteran has been interim chief since Sally Dungan’s death a year ago.

Craig W. Smith

Craig W. Smith has been tapped as the new chief investment officer of Tufts University, overseeing its $2 billion endowment.

An experienced financial services professional specializing in institutional investing, Smith has been serving as the interim CIO since March 2020 while the school conducted a national search. He replaces Sally Dungan, who died of cancer a year ago.

Smith called the appointment a great honor, noting Dungan’s accomplishments as Tufts’ first CIO and a trailblazer in the field. Leading the endowment since 2002, she nearly tripled its size during her tenure.

The position was one of the CIO realm’s most watched vacancies. Another high-profile opening is at the State of Wisconsin Investment Board (SWIB), which is conducting a search to replace David Villa. He served as SWIB’s CIO from 2006 until his death in February.

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As Tufts’ interim CIO, Smith developed long-term strategic plans for endowment assets, helped guide the investment office through a period of change, and enhanced the level of engagement between the investment office and the broader university.

“I am thrilled to be named Tufts’ chief investment officer,” Smith said. “It is an incredible opportunity to lead an outstanding investment team as we build on the platform that Sally created.”

He joined Tufts in 2018, first working as investment director, leading the marketable investments team. In this post, he engineered a restructuring of the university’s public equity, marketable alternative, and fixed-income investments.

Before Tufts, Smith was a partner at Cambridge Associates, where he managed more than a dozen portfolios for university endowment and foundation clients over a dozen years. What’s more, Smith was a founding member and a CIO within the firm’s outsourced chief investment officer (OCIO) practice, CA Capital. Prior to Cambridge Associates, he worked at Grove Street Advisors, where he conducted due diligence on private equity and venture capital managers.

Smith received a Master of Business Administration from the Wharton School at the University of Pennsylvania, where he was a Palmer Scholar, and a bachelor’s from Dartmouth College.

“Craig’s deep understanding of Tufts’ financial objectives and culture and the breadth of his prior investment experience uniquely position him to lead Tufts’ investment office forward,” said Michael W. Howard, executive vice president, in a statement. Smith will report to him and the investment committee of the university’s board of trustees.

NY State Pension Restricts Oil Sands Investments

The $247.7 billion fund has its sights set on shale oil and gas companies next.

By Michael Katz

The $247.7 billion New York State Common Retirement Fund said it will restrict investments in oil sands companies it deems unprepared to “transition to a low-carbon economy,” and will sell off the investments it already has in those kinds of companies.

The fund said it decided to ban investments in oil sands companies because they produce a heavy type of crude oil that is more costly and carbon-intensive than other forms of crude production. The fund currently holds more than $7 million in such securities, but said those “will be sold in a prudent manner and time frame.”

The fund named seven companies it said failed to show they are transitioning out of oil sands production. It said it will not directly purchase, nor directly hold debt or equity securities, nor invest through an actively managed account or vehicle in the companies. The seven companies are Imperial Oil Ltd., Canadian Natural Resources Ltd., Husky Energy Inc., MEG Energy Corp., Athabasca Oil Corp., Cenovus Energy Inc., and Japan Petroleum Exploration Ltd.

The fund said it made its decision after evaluating each company’s transition strategies, capital expenditures, and greenhouse gas reduction targets, among other factors.

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“We have carefully reviewed companies in the oil sands industry and are restricting investments in those that do not have viable plans to adapt to the low-carbon future,” New York State Comptroller Thomas DiNapoli said in a statement. “Companies responsible for large greenhouse gas emissions, like those in this industry, pose significant risks for investors.”

DiNapoli said his evaluation of the fund’s oil sands holdings was part of his review of the “transition readiness” of energy sector investments that have a significant climate risk. Last year, the fund divested from 22 firms that it said “failed to demonstrate transition readiness.”

In 2019, DiNapoli released the fund’s Climate Action Plan, which is intended to lower investment risks from climate change and transition the fund’s investment portfolio to net-zero greenhouse gas emissions by 2040. The plan includes a goal of committing $20 billion to sustainable investments, creating a staff to pursue climate solution investments, and implementing minimum standards for portfolio companies to inform engagements, investments, and potential divestment decisions.

The fund said it will next evaluate shale oil and gas companies.