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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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Director of investments for $2.5bn endowment

INTERVIEWS

Vicki Fuller xCIO NY State Common Ret. Fund

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 $210bn NY State Common Ret. Fund

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

Letitia Johnson, new CIO at Amherst

2006-2019 Cambridge Assoc., MBA Yale, BA Brown

Joe Cullen, new CIO at Penn State University

Mr. Cullen joins investment office Sept 2019. 4yrs as CIO at Montana Board of Investments, x Fidelity, x Amherst, x Lucent. MBA Carnegie Mellon, BA Ripon College.

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SKORINA IN THE NEWS

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

4-11-19 Wall Street Journal: The Rockefellers Want to Manage Investor’ Money

Trustees: Are you holding your investment office accountable?

We have worked over three decades recruiting chief investment officers and advising boards on investment performance and our research on investment leaders goes back years. No one has been a stronger supporter of building internal investment management teams than us.

But lately we've been wondering if non-profit boards and trustees are holding their investment offices accountable for performance.

Here is what's bothering us: Many tax-exempt institutional investors have underperformed public markets for ten years and more and, according to board members we have spoken with, failed to meet the needs of their stakeholders.

In some cases, as we have highlighted in past newsletters, it's the board's fault. Dissension or timidity tied the hands of highly skilled staff. In others, the chief investment officer just didn't have what it takes.

So, here's the way some of our trustee clients see it: If the current investment team at an endowment, foundation, pension fund, or family office can't out-perform the market over a reasonable period, say five to ten years, then the trustees or principals should replace them with those who can...or get out of the investment business.

In our latest study of large endowment performance, not one investment office out of the hundred we ranked beat the S&P over five years and only a third managed to out-perform a traditional sixty-forty stocks and bonds portfolio.

We tend to focus on foundations, endowments, and family offices but, in the larger universe of pension investors the story is mostly the same.

The annual report of the $150-billion Texas TRS fund (seventh-largest tax-exempt fund in the country) just became available, and Scott Burns at the Dallas Morning News gave it a hard look this week.

Over ten years (ending August 2018) they earned an annualized 7.1 percent with a portfolio that's more than 40-percent invested in alternatives.

By comparison, the one-stop Vanguard Balanced Index Fund, invested entirely in marketable U.S. stocks and bonds, earned 9.95 percent. The Vanguard fund also beat them over one, three, and five years.

He concludes:

The comprehensive annual report provides thoughtful reasons for this, laying out its sophisticated case for global equity, stable value, real return and risk parity investments.

But simplicity and low cost would have been worth $46.2 billion more [over the same ten-year period].

The mysterious shortfall in women chief investment officers

In our last newsletter we looked at the number of women CIOs at big endowments*. Among 109 North American endowments over $1 billion we identified 20 (including one female director of investments and one CFO who liaises with their OCIO providers).

That’s just eighteen percent – less than one out of five.

For this issue we also took a look at the mid-sized schools (in the $500 million-to $1 billion bracket), to see if the situation is any better.

Unfortunately, that’s a no. We found 10 females among 85 schools. That’s just 12 percent – a significantly lower representation that among the bigger schools.

We've inserted a chart below with the CIOs ranked by AUM.

Twelve percent in this group is not quite as bad as it sounds. That’s because mid-size endowments are less likely to have dedicated in-house investment staff – either men or women.

Many prefer to outsource, or to use a committee-and-consultant model without an internal investment office.

But it’s still not a great number.

Although we haven’t done an exact count, we should note that females are well represented among professional slots at the major OCIO firms and consultants. These are good jobs, and often a gateway to CIO jobs (although they usually don’t pay as well).

This may somewhat mitigate the overall situation for women jobseekers.

Charting the trend

That’s the static picture, but the trend is even more important.

Is that gap worsening, or about the same over recent years?

Unfortunately, it seems to be widening.

Looking at recent turnover, 9 departing female CIOs have been replaced by men; while only 3 were replaced by other women.

Just one departing male was succeeded by a female.

These turnovers are detailed in the next chart.

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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