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Charles Skorina & Company

● RETAINED EXECUTIVE SEARCH ●

Our Clients: Boards & Trustees, C-suite Executives, Family Offices
Our Services: we recruit board members, chief investment officers, senior asset managers

Michael D. Pia, new CIO at $1.9bn Texas A&M Fdn

Mr. Pia recruited from TRS Tx (13yrs), x Lockheed Martin, x US Marine Corp 11yrs, MBA Tx Christian, MS U West Florida, BS US Naval Academy

John D. Skjervem, new CEO at Alan Biller & Assocs. ($100bn total, $60bn OCIO)

Mr. Skjervem, CIO & Director Inv Div $111bn Oregon State Treasury moves to ABs Menlo Park, CA office in April. xEVP & CIO Northern Trust wealth division, MBA U Chicago, BA UC Santa Barbara

Tilly Franklin, new CIO at $3.9bn U Cambridge endowment

Cambridge board member, x PE head at family office Alta Advisers, x Apax Partners, x BBC Americas. MA London Bus School, Harvard Kennedy Scholar, MA U Cambridge, Westminster School

Anastasia Titarchuk, promoted to CIO at $216bn NY State Common Ret. Fund

Ms. Titarchuk promoted from dep CIO, 8yrs NY Common, x BofA, Barclays, JPMorgan, BS Yale

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SKORINA IN THE NEWS

9-27-19 The Boston Globe: Harvard endowment underwhelms again

8-9-19 Bloomberg News: Yale’s David Swensen and His Alums Are Among Best-Paid Endowment Heads

5-7-19 Institutional Investor: Fight Over Pay Erupts at New Mexico’s Pension Fund men

5-7-19 Pensions & Investments: Endowments led by women outperform those led by men

5-7-19 Institutional Allocator: Shortfall in Women CIOs at Endowments is Mysterious

All-Weather Investment Leaders: We Need Them Now!

We've had a remarkable run in the institutional asset-management biz. Good enough to camouflage a lot of mismanagement and sub-optimal decisions.

But we all know that there is trouble ahead and that sooner or later there's going to be a reckoning.

When things fall apart again, will your foundation or family office be managed by experienced, agile leaders who can cope? Will they keep cool heads when others are losing theirs?

A few years ago an endowment CIO told me: “The board hired us [investment staff] after the 2008 crash because they realized that they never fully understood what they had in their portfolio and there was no one on the inside who could expose and explain the risks.”

“The consultants at the time met with the board once a quarter and kept telling the trustees that everything was fine until our portfolio fell off a cliff.”

The Reckoning

Are there new bubbles about to burst? Here are two possibilities; the unprecedented growth in index vehicles, and the stampede into private equity funds.

The Wall Street Journal reported late last year that the value of US index equity funds had just surpassed US actively managed funds by $4.27 trillion to $4.25 trillion. The Investment Company Institute disputes the Morningstar data, but the growth and appeal of indexing is undeniable.

Who can resist the allure of cheap and easy index funds and ETFs? From 2009 to 2019 the S&P returned a beguiling 11.27 percent annualized, excluding dividend reinvest, and indexers could do no wrong.

Unfortunately, bull markets breed short memories. Few recall that in the prior decade from 1998 to 2009, the S&P actually lost money, delivering a negative 2.72 percent. (Falling a calamitous 55 percent in the final two years, September 2007 to March 2009.)

As for private equity, PitchBook Data calculates that over the last ten years more than three trillion dollars has flowed into private equity and venture capital funds worldwide.

This despite the fact that since 2005, the returns from these illiquid funds have been little better than liquid public market performance.

Some of the best investors in the business have taken notice and are preparing for the possibility of a collapse.

The OCIO Dilemma: If You Can’t Build It; Buy, Sell, or Merge

Active management is feeling more love these days. With the surge in institutions looking for investment help, there is new-found affection for the experience, judgement, and human touch provided by outsourced CIO firms.

But with opportunity pounding on the door, why do so few OCIOs hunger for growth? Where's that entrepreneurial drive, that vision, passion, and focus on becoming the biggest and the best?

We have been tracking the industry for over a decade and have yet to see a single independent OCIO provider break through the one-hundred billion AUM level. Not one. Most will never reach twenty billion.

The OCIO business, as defined by Commonfund is...the practice of delegating a significant portion of the investment office function to a third-party provider, typically an investment management or consulting firm.

The industry, with $2.38 trillion in assets as of our latest report, is bifurcated, highly diverse, intensely competitive, and the largest six providers on our annual OCIO list - Aon, Blackrock, Goldman Sachs, Mercer, Russell and Willis Towers Watson - with their size and resources dominate the largest segment, corporate pensions.

In this segment, reality bites. There are only about three-hundred remaining internally managed corporate pensions over a billion AUM and those that outsource will chose one of the big six mentioned above or a major insurance company. Boutique OCIOs have no chance for the business.

Most new prospects dwell in the sub-$1 billion realm - endowments, foundations, health systems, charities, and associations - and smaller sub-$200 million customers including ultra-high-net-worth families and nonprofits.

The good news is that there are about fifteen hundred colleges and universities in the US (about one-hundred-fifty endowments over $1 billion and another one-hundred-fifty in the $500 million to $1 billion bracket) and several thousand foundations, health systems, charities, and associations.

The bad news is that most of the eighty-three firms on our list compete in this space along-side RIAs, brokers, and advisors. Literally hundreds of rivals.

Most of these competitors would be much better off buying, selling, or merging with other providers instead of grinding away with little gain.

Here's why.

CHARLES A. SKORINA & COMPANY works with leaders of Endowments, Foundations, and Institutional Asset Managers to recruit Board Members, Executives Officers, Chief Investment Officers and Fund Managers.

Mr. Skorina also publishes THE SKORINA LETTER, a widely-read professional publication providing news, research and analysis on institutional asset managers and tax-exempt funds.

Our Practice:

• We recruit Board Members and Executive Officers, Chief Investment Officers and Senior Asset Managers.

• Our research and analytics are backed by over thirty years of hands-on recruiting experience and an unrivaled personal network.

• We collect performance, compensation, and background data on most senior institutional investment professionals in the U.S. and the funds they manage. We analyze that data to construct profiles of those managers and their funds, identify best-in-class people, and map their career trajectories.

• We share our research and insights in a widely-read professional newsletter – THE SKORINA LETTER – and website – www.charlesskorina.com.

• The New York Times, Wall Street Journal, Bloomberg, Thompson Reuters, Financial Times (Fundfire), Institutional Investor, Pensions & Investments, Private Equity International, and the institutional investment community use our research and analysis. Skorina has been interviewed on chief investment officer compensation issues on Bloomberg TV.

• Our work is regularly re-printed in Allaboutalpha.com and other industry magazines, blogs, and third- party web postings.

• We focus specifically and effectively on the world we know: Board members and Executive Officers, Chief Investment Officers, and Senior Asset Managers at institutional investment firms and funds – including sovereign wealth funds, endowments, foundations, pension funds, banks, investment banks, outsourced chief investment officer firms (OCIO), and sell-side money managers.

Prior to founding CASCo, Mr. Skorina worked for JP MorganChase in New York City and Chicago and for Ernst & Young in Washington, D.C.

Mr. Skorina graduated from Culver Academies, attended Michigan State University and The Middlebury Institute of International Studies at Monterey where he graduated with a BA, and earned a MBA in Finance from the University of Chicago. He served in the US Army as a Russian Linguist stationed in Japan.

Charles A. Skorina & Co. is based in Tucson, Arizona.

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