Calpers needs a new CIO for $450B fund, but it’s no easy job

investmentnews.com:

The largest public pension fund in the US is looking hire a new chief investment officer by early next year following the surprise resignation of its previous leader less than 18 months on the job.

The California Public Employees’ Retirement System is aiming to fill the CIO role by sometime in January, and several potential candidates have already expressed interest, Chief Executive Officer Marcie Frost said in an interview at Bloomberg’s San Francisco office. The $451 billion fund is retaining a head hunter firm and Frost said she is searching for an executive with private asset experience as Calpers plans an aggressive expansion into private credit. 

Filling Calpers’s top investment job has been notoriously challenging. The CIO faces scrutiny from a 13-member governing board, transparency requirements imposed on public employees, and a salary that can be less than half that of peers in the private sector. It took 18 months to name the pension’s most recent CIO, Nicole Musicco, following the abrupt resignation of Ben Meng in August 2020.

Then there’s pressure of meeting the pension plan’s 6.8% annual return target. If it falls short, municipalities across California could be forced make up the difference and even cut services to meet obligations. The fund earned 5.8% last fiscal year, a sharp turnaround after a 6.1% loss in the prior year that was its worst showing in more than a decade. 

“There’s a type of personality that actually appreciates being in the public eye, frankly, and having $460 billion, they get to have a view point,” Frost said in the interview Tuesday. “So that’s the type of person that we are looking for. Again, there may not be a lot of them, but Calpers has a draw.”

Frost’s comment come as the