It’s always good to start the New Year off with fresh ideas. Like many of you, we have big plans, and we’re bringing on board new leaders to help us achieve our goals. The creativity, expertise, and passion our leadership team brings to our daily efforts help us to stay focused on our mission of service to you. Here are three things to look forward to in 2019.
A New Investment Leader
Ben Meng joins us this month as our new chief investment officer, replacing Ted Eliopoulos, who left at the end of the year to move to the East Coast.
Ben, a United States citizen born in China, is no stranger to CalPERS. He first joined us about 10 years ago as a fixed-income portfolio manager and moved up in our Investment Office before leaving in 2015 to become the deputy CIO for the State Administration Foreign Exchange in China.
Ben’s background at CalPERS and his experience as an investor mean he can hit the ground running. We’re counting on that. We’ve made solid progress on making our fund stronger, but we still have a lot of work to do. Ben’s leadership and skills are key to keeping the momentum going.
Financial Office Leadership
Michael Cohen, the former director of the California Department of Finance, is our new chief financial officer. Michael served as Governor Jerry Brown’s top budget expert for five years. His knowledge of government and experience with complex budgets make him a great fit to lead our outstanding financial team.
Joining Michael in our financial office is Michele Nix, our new controller, and Jennifer Harris, the new chief of our Financial Planning, Policy and Budgeting Division.
Michele has over 30 years of experience in government and the financial services industry at state and municipal levels. She comes to us from Columbia, Missouri, where she was the city’s director of finance. Prior to that, she was the chief financial officer for the Missouri State Employees’ Retirement System. As controller, Michele is responsible for trust accounting, financial accounting and reporting, and accounting services.
Jennifer joins CalPERS from the California Department of Developmental Services, where she served as the fiscal forecasting branch manager. She brings 20 years of government experience in program oversight, budgeting, and administrative areas, and will be responsible for administering our budget processes and financial planning.
Private Equity Models
For well over a year now, we’ve been exploring other approaches to our private equity program. It’s our highest returning asset class over the past 20 years, but the industry is changing and we have to change with it to capture the investment returns we need in the years ahead.
The new models under consideration by our board will position us to more quickly take advantage of investments in companies in life sciences, health care, and biotechnology. We’ll also be looking to invest long term in established businesses.
Our funded status is 71 percent. We’re committed to increasing it to reduce the risk to our portfolio and ensure we’ll be here to pay the pensions our members have earned. It will take years to get it to 80 or 90 percent, but we’re on the right track.
We have about 8 percent of our portfolio invested in private equity. These private equity models can help us achieve a 10 percent allocation to this important asset class. That’s a significant help as we concentrate on the total fund returns we need to continue to strengthen our fund.