Home ListingJuly 22, 2015

Wanted: CIO to Lead UAW’s $55B Medical Trust

The position has been vacant since Ken Frier’s exit last September, and UAW is looking for the industry’s very best to fill the spot.

Reported by Featured Author

The United Auto Workers (UAW) Retiree Medical Benefits Trust is looking for a seasoned player to replace former CIO Kenneth Frier.

The new chief would head up investments for the $55 billion trust established for 744,000 former employees of Ford, General Motors, and Chrysler.

“The ideal candidate will have the skills needed to develop and maintain a successful long term investment philosophy for the trust, coupled with an ability to anticipate trends and capitalize on new opportunities as they arise.” —UAWAccording to the job posting, the investment chief would manage an 18-member staff in Ann Arbor, Michigan to produce returns to fund both short-term and long-term benefits.

UAW also emphasized the importance of the CIO’s ability to maintain a “highly productive working relationship” with the committee that determines investment policy and monitors decisions and results.

The CIO would report to Adam Blumenthal, chair of the investment committee, and Fran Parker, the executive director, the job description said.

The position has been left vacant since Frier’s resignation last September. The former CIO of Stanford University’s endowment and Hewlett-Packard’s retirement plan—and Power 100 member—had been at the trust for just two years.

In an interview with CIO in 2013, Frier said UAW’s unique structure and obligations posed certain challenges for him and his team.

“We can’t just follow the endowment model,” he said. “Because we have a larger outflow than most endowments or foundations, we need to have a larger amount of our portfolio in liquid assets. And that presents the challenge, as most traditional liquid asset classes—stocks, bonds—are likely to have lower than average historical returns.”

Frier instead used factor exposures to seek assets that should grow in a bear market and focused on active risk management and flexible allocations.

These needs led Frier to establish long-term “liquid asset partnerships” with five large management firms, each with specific goals. “The emphasis is on multi-asset strategies that have low correlation with public equity markets and on having factor exposures,” he added.

Since Frier’s exit—eventually landing at San Francisco-based advisory firm Atlas Capital—Senior Managing Director Avtar Vasu served as interim CIO.

UAW’s list of requirements to fill the seat is extensive.

The health trust seeks a visionary with a passion for investing and the ability to anticipate and respond to trends to capitalize on new opportunities.

The ideal candidate would have substantial relevant experience and a demonstrated track record, UAW said. It would also prefer candidates capable of working with traditional and alternative investments and a “knack for integrating ‘top down’ and ‘bottom up’ perspectives.”

Furthermore, the candidate should have insights into incorporating environmental, social, and governance factors into investment strategies, and be able to develop effective long-term partnerships with external managers.

UAW is also looking for a strong leader who would be committed to the trust’s ideals and cultural norms. He/she would also have investment credibility, integrity, and confidence to inspire staff and serve as a thought leader in the industry.

To qualify, candidates must have a bachelor’s degree in a relevant field. Higher degrees and certifications including an MBA, a master’s degree, and/or CFA are strongly preferred.

Executive recruiter Korn Ferry is facilitating the search. The job listing is set to expire on September 15.