University of California Appoints Former Tata Group Chairman

Ratan Tata, senior advisor, UC Office of the CIORatan Tata, the former chairman of Indian conglomerate Tata Group, is to take up a senior advisor role at the University of California’s (UC) investment office.

Tata, who starts his role on December 1, will advise on international policy, including Asian and Indian opportunities for UC’s $91 billion portfolio of retirement, endowment, and cash assets. CIO Jagdeep Bachher plans to invest up to $1 billion in Asian public and private markets in the next three years, according to a media statement.

“Ratan Tata is a business legend and inspiration,” Bachher said. “Given his wealth of experience and relationships in India and globally, the University of California will benefit immensely from his insights on the growth of global businesses as we enhance our Asian investments portfolio.”

Tata said it would be “a pleasure and an invigorating experience” to work with Bachher and his team as they consider investments in “innovative new technology startups and private companies in the US and Asia.”

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Tata stepped down as chair of the Tata Group in 2012 after more than 20 years in charge of the company. During that period, it grew revenues from $5 billion in 1991 to more than $100 billion in 2012. The group has subsidiaries in dozens of industries such as steel production, car manufacturing, hotels, and even asset management.

Tata currently sits on the board of engineering company Alcoa, and has advisory roles with Mitsubishi, JP Morgan Chase, Rolls Royce, and the Monetary Authority of Singapore. He also serves on the board of trustees of his alma mater Cornell University and the University of Southern California.

The appointment is the latest in a string of high-profile hires made by Bachher since he became CIO in April 2014. Rick Bookstaber—co-author of the Volcker Rule—joined as chief risk officer in June this year. Scott Chan, formerly of Sacramento County and Sam Kunz, ex-Chicago Policemen’s Annuity and Benefit Fund, have both traded the CIO title for managing director jobs with UC in the past 12 months.

In December’s issue of Chief Investment Officer, managing editor Leanna Orr spends a day with the UC investment team—subscribe now for your copy.

Assets invested in active exchange-traded funds (ETFs) have reached $32.9 billion—a new record for the asset class.

According to ETFGI, active ETF allocations increased 23% in the last year alone, with net inflows of $8.9 billion in the first ten months of 2015.

A majority of active ETF investments came from the US, with a total of $21.8 billion committed to the asset class. European investors contributed $6.3 billion, while $3.9 billion came from Canada.

Actively-managed products accounted for just over 1% of the broader ETF market, which totaled more than $3 trillion.

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Deborah Fuhr, managing partner at ETFGI, said future growth by the active ETF industry is dependent in part on the Securities and Exchange Commission (SEC), as “many asset managers are waiting to see if/when the SEC allows non-transparent active ETFs.” Non-transparent products would be exempt from publishing their holdings every day, which all ETFs are currently required to do.

Meanwhile, ETGI reported that smart beta equity ETFs attracted $53.7 billion in the first ten months of 2015. Although market cap equity ETFs remain the most popular, accounting for $1.8 trillion in assets, demand for strategic products like smart beta and active ETFs is growing at a faster rate, the firm reported.

“Smart beta equity products are growing significantly faster at 39.3% while market cap has been growing at 18.6%,” said Fuhr.

Currently, there are 764 smart beta ETFs and 232 active products in operation globally.