NJ Pension Names Acting Director to Top Job

(March 11, 2014) – The treasurer of New Jersey has appointed Chris McDonough as director of the state’s $87 billion investment division.

McDonough, the frontrunner for the position since it opened last August, has served as acting director throughout the vacancy.

The widely admired former Director Tim Walsh resigned last summer for a private sector position with Chinese real estate firm Gaw Capital. McDonough spent three years as his deputy.

Now, following a unanimous recommendation by the state investment council and search committee, McDonough has officially been named Walsh’s successor.

“Chris McDonough has done an outstanding job as deputy director and, for the last few months, as acting director of the division,” said Robert Grady, chairman of the search committee and investment council, as well as managing director of private equity firm Cheyenne Capital. “He is both a good investor and good manager of people,” Grady said, “and he will be a great leader for the division.” 

McDonough joined the Trenton-based organization in 2010, following a nine-year rise to the top of Philadelphia’s public pension system.

As director of New Jersey’s $78 billion in pension assets and $10.6 billion cash management fund, he oversees one of the largest pools of institutional capital in the country.

More than 100 people applied for the position and more than a dozen were interviewed, according to Chairman Grady, although he had singled out McDonough as a strong contender before Walsh had even left the office. 

“At the moment, we’re casting a wide net,” Grady told aiCIO in late August, 2013. “We are explicitly considering both internal and external candidates. I already know one strong candidate, Chris McDonough, who we recruited to be the deputy director from his position as CIO at the City of Philadelphia.” 

Attracting and developing talent has been notable strength of New Jersey’s investment office. Retaining it has not. 

When Walsh stepped down last August, he was the third senior staff member to resign in 18 months. Two key architects of the landmark strategic partnership program also departed for the private sector: former alternatives head Christine Pastore and Bryan Martin, who had led real assets and opportunistic investments. 

Compensation was the deciding factor in all three departures, according to Walsh and Grady. 

It’s unclear whether McDonough’s salary as director will exceed the $185,000 total compensation package paid to Walsh. In an interview following the former director’s resignation, Grady spoke in favor of performance incentives for senior staff and said it was “time to address that issue.” Substantive changes to staff compensation would require legislative action. On the day of the McDonough's appointment, Grady characterized the the revamp as a "work in progress."

McDonough could not be reached immediately for comment. He is scheduled to speak at the upcoming CIO Summit in New York about the strategic partnerships with Blackstone and Och-Ziff that he helped orchestrate under Walsh, and now oversees as director.