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Charles Skorina & Company

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We recruit board members, chief investment officers and senior investment professionals
for endowments, foundations, family offices and institutional asset managers

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Chief Investment Officer for $1.5bn insurance portfolio

INTERVIEWS

Vicki Fuller xCIO NY State Common Ret. Fund

Alex Doñe, promoted to CIO, NYC Bureau of Asset Management

Former interim CIO, head private markets, private equity, x US Department of Commerce, x KPMG, x Merrill Lynch 11yrs, AB Princeton

Jane Dietze, promoted to CIO at Brown University

Joseph Dowling III becomes CEO. Ms. Dietze, x Bowdoin, Fortress, World Bnk, and GS. MS Johns Hopkins, BA Princeton

David Wallace, first dedicated CIO at Pomona College

Mr. Wallace, joined Pomona’s investment office ($2.4bn) in 2012 after 6 years as finance/portfolio manager at World Vision. MBA/BQ Azusa Pacific University

Srinivas “Srini” Pulavarti, heads east to Emory as CIO

Mr. Pulavarti moves to Emory in Atlanta after 5 yrs at UCLA. x Spider Mgmt, x Citi, x Johns Hopkins. MS Marquette, BS Bangalore.

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SKORINA IN THE NEWS

9-19-17 Bloomberg News: Harvard’s Investment Chief Says 8.1% Return Signals ‘Deep Structural Problems’

https://www.bloomberg.com/news/articles/2017-09-19/harvard-ceo-says-8-1-return-signals-deep-structural-problems

9-18-17 Harvard Crimson: Strong Public Markets May Bode Well for Harvard

http://www.thecrimson.com/article/2017/9/18/peer-institutions-post-results/

1-26-17 Boston Globe: MIT’s endowment posts fourth-best returns

https://www.bostonglobe.com/business/2017/01/26/mit-endowment-posts-fourth-best-returns/YErvAo2hVqwCSBR5wH1AFO/story.html

1-25-17 The New York Times: Harvard Makes Changes in Managing a Lagging Endowment

https://www.nytimes.com/2017/01/25/business/harvard-endowment-management-changes.html

1-25-17 Financial Times: Harvard’s $36bn endowment to hire external managers

https://www.ft.com/content/64711864-e32d-11e6-8405-9e5580d6e5fb

Chief Investment Officer Pay in 2018/2019

Our projections - Growth slowing to 7 percent for endowment CIOs

Back in October, we reported the latest-available compensation numbers for 74 chief investment officers at the biggest (over-$1 billion AUM) endowments.

We used the most recent filings for our data, but those numbers (for calendar year 2015) were already pretty stale.

As we said then, the hitch is the long time-lag -- more than two years -- before IRS data is publicly available.

Now we're back with our own estimates of what these CIOs are actually making right now, in real time, extrapolating from 2015 to 2018.

We find that typical CIO pay has been growing at a compound rate of more than 7 percent per year

We looked at a large subset of those original 74 CIOs, 32 who had held office for five consecutive years, 2011 to 2015. It's a big enough and inclusive-enough subset (big and small, public and private, geographically diverse) that we feel comfortable projecting our findings to the whole population of 74 CIOs.

From that time-series we projected out three more years to get point-estimates for 2018.

(To be clear, this is total W2 compensation, including base, bonus and "other" as classified by the IRS. It omits other benefits which are not taxable to the CIO, but which may be significant.)

The median big-endowment CIO made approximately $609,000 in 2011. Five years later, in 2015, he or she was making about $1,100,000. That's a rise of about 80 percent over five years.

Stated as a compound annual growth rate (CAGR), that's 12.6 percent per year.

But that's based on historical data. We then needed to push our trendlines out from 2015 to 2018, for which we have no data. So, stand back, some freshman math is required.

We found that CIO pay is still growing briskly, but that the growth rate seems to be slowing in recent years.

From 2015 to 2018, we estimate that the median CIO in our sample grew his/her pay from $1,100,000 to $1,380,000, for a rise of 26percent over three years.

As a CAGR, that's 7.1 percent per year.

The chart below shows the pay for the 32 CIOs in our study and projections for the 21 who are still in office this year.

Family wealth: finding purpose, fighting entropy

A conversation with Stuart Lucas: wealth manager, educator, and family scion

Stuart Lucas has double-barreled credentials as a wealth manager.

He's a Harvard MBA who worked for years with top-shelf financial firms including Wellington Management Company and Banc One (now JP Morgan Chase), where he led their Ultra HNW unit.

And, he is himself an heir to family money by way of his great-grandfather, E. A. Stuart, who founded the Carnation Company. In 1985, the closely-held business was sold to Nestle, and the proceeds were distributed among Mr. Stuart's descendants.

In 2004, Mr. Lucas merged his professional and personal worlds by founding Wealth Strategist Partners, which continues today as the investment advisor to his and selected other family offices.

He has gone on to design and lead a Private Wealth Management executive education program, designed specifically for wealthy families at the University of Chicago Booth School, now in its 12th year. And, as an adjunct professor, he has taught a Wealth and Family Enterprise Management course at the MBA level.

All this experience has also been distilled into his widely-read book, Wealth: Grow It and Protect It, for general readers; and into academic-quality papers for The Journal of Wealth Management.

We're delighted that he made some time to talk to us.

Keeping it in the family

It is better to have a permanent income than to be fascinating.

- Oscar Wilde

Skorina: Stuart, where do you begin with a new client who has to deal with all of this for the first time?

Lucas: Charles, a family office with significant wealth has many moving parts. There's money-management per se, which you focus on; and it's crucial.

But, there are also the structural, legal, and tax issues. And there are opaque but vital intra-familial and cultural issues that have to be dealt with. They're all important, and all inter-related.

The laws and tax rates keep changing, so do markets, and so do the families themselves. We try to design and execute an integrated strategy that balances all these elements.

Skorina: So, how do you start the conversation with a new client

Lucas: When we sit down with a family who's thinking about hiring a wealth manager or setting up a family office, my top discussion points are:

What do you want to accomplish with your wealth?
What's the right structure for managing your family money? How will it be governed?
How will your family members be educated about their wealth and held accountable to each other?
Do you understand that taxes affect everything? Tax-planning is critical for wealth-preservation.
You will need help: a wealth advisor, an attorney, an accountant, and perhaps a family-office or outsourced chief investment officer.

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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