FROM: Debby Cherney, Chief Executive Officer
Donald Pierce, Chief Investment Officer
Stacey Barnier, Chief Human Resources Officer
SUBJECT: Investment Team Expansion
RECOMMENDATION:
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Recommend that, through the FY 2025-26 Budget, the Board approve the addition of three Associate Investment Officers.
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BACKGROUND:
In the last ten years, SBCERA’s investment assets have nearly doubled from $8 billion (as of June 30, 2014) to $15.2 billion (as of June 30, 2024), with additional growth during FY 2024-25. That growth has been accomplished with a core investment team consisting of four investment officers. Although the title of those officers have changed throughout the last decade, it is clear that with double the investments assets, a mandate to expand the number of managers in specialty areas, and the need for appropriate risk management and succession planning, there is a need to consider expanding the team. The Investment Team is composed of the following:
1. Core Investment Team: Chief Investment Officer, and three Senior Investment Officers;
2. Analytics and Middle/Back Office: Data and Portfolio Analytics Manager, and two Senior Investment Analysts; and
3. Administrative Support: Deputy Clerk of the Board, and Office Specialist.
Earlier this year, the Chief Executive Officer and the Chief Human Resources Officer met with the four Investment Officers to explore how best to address a variety of questions, including scalability, skills, gaps, succession planning, how work is distributed amongst the team, and what work they wish they had more time on which to focus. Over the course of the offsite meeting, the team coalesced around the need to have more time for research, documentation, analytics, bigger picture thinking, shaping relationships, creating new relationships with a diversity of vintage, size and ability to deploy capital, and better leveraging existing and potential technologies. Additionally, staff discussed the potential impact of a departure of one or more investment officers, whose existing work would be extremely difficult to absorb by the remaining team, even if only on a temporary basis.
Staff concluded that the team would benefit from having a team of junior investment professionals. Some of the key skills and characteristics identified by the team include:
- Passion and intellectual curiosity
- Interest in investing with a purpose
- Ability to synthesize information
- Strong quantitative analysis skills
- Good communications skills - both written and verbal
- Relationship-building mindset
- Generalist, likely a few years out of college or graduate school, with a few years of experience
- Ability to discern what is important (and what is not)
- Resourceful self-starter, ability to work independently, and be a team player
- Experience with investment documents
The Human Resources team will craft the team’s priorities into SBCERA’s job recruitment framework, and craft job descriptions and recruitment strategies.
The Associate Investment Officer is proposed to be classified at Range 56. A proposed Salary Schedule, incorporating the new classification, is attached as Exhibit A. In a companion item on this Executive Committee agenda, staff has incorporated a recommendation that the Associate Investment Officer classification be included in the SBCERA Incentive Compensation Plan.
Staff requests that the Committee provide feedback and comments prior to incorporating this new concept within the SBCERA Annual Budget for FY 2025-26.
BUDGET IMPACT:
Costs for this item are not included, nor are required to be included, in the current year administrative budget.
STRATEGIC PLANNING GOAL/OBJECTIVE:
Quality Employer and Workplace
Prudent Fiscal Management
STAFF CONTACT:
Debby Cherney
ATTACHMENTS:
Exhibit A: Proposed Salary Schedule (to be provided)