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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 $1.5 Billion portfolio

INTERVIEWS

Rukaiyah Adams CIO Meyer Memorial Trust

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

A Family Office Home Companion

Honey, We're Rich!

Say what, dear reader? You have just been blessed with a humongous liquidity event?

After decades of work and a bit of luck you "suddenly" have millions, perhaps even tens or hundreds of millions of dollars in investible wealth after selling your business or going public.

You are now officially rich, and it feels great.

But wait. What's that? Obscure family members you never knew existed are beseeching you for "loans"; allegedly good causes from Missoula to Mozambique are demanding donations; sketchy financial "advisors" are bombing your email and phones with "once-in-a-lifetime opportunities."

First things first

We've recruited family office investment heads and advised on selecting wealth-management firms. But it works both ways. We listen very carefully to our clients and learn a lot from them.

Here is some advice from clients who have been through it.

1. The very first thing. Hire a tough, experienced lawyer who is used to dealing with wealth managers, brokers, and solicitors. (Not just the firm who helped you with routine legal chores on the way up.) It will be money well spent and you won't regret it. You will need a real pro to run interference for you against the sharks.

2. The very next thing. Hire a reliable and reputable accountant who understands the complexities of wealth-management. You will need financial controls and a voice of caution. Dollars can slip away fast without an experienced check on your newly-rich exuberance.

3. Take your time. No sudden moves. Think about how to organize your affairs, your objectives, impact on family-members and upcoming generations.

4. Establish a realistic spending rate. And stick to it. One rashly-purchased yacht, jet, or hobby-ranch can punch a surprisingly big hole in your seemingly-unsinkable new fortune.

Fortune and fate

Entrepreneurs and business titans mostly made their money from shooting the lights out on a single venture. Dell, Brin, Gates, Zell, Zuckerberg, went "all in" and won big. Their recipe? Highly-concentrated investments, risk-taking, innovation, and sheer audacity.

But here’s the nub. Wealth is created by entrepreneurs, but maintained by diversification, sophisticated risk-management, and prudence.

And that's the dilemma. People good at wealth-creation have had little time or experience with wealth-maintenance, where capital preservation is paramount, and diversification is the key. It's a different mind-set and a different set of skills.

Family wealth management: build or buy?

Chief Investment Officer Pay in 2018

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.

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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