Large public pensions are always on the lookout for new talent and smaller managers, and the CIOs of four large pension systems recently shared advice to firms looking to break in.
The CIOs of the $151 billion Florida State Board of Administration, the $150 billion Teacher Retirement System of Texas, the $120 billion New York State Teachers’ Retirement System, and $28 billion Texas Employees’ Retirement System discussed their approaches to finding new managers at Texas Teachers’ annual emerging manager conference on February 7.
While each pension fund had its own policies, some common themes that emerged included the importance of specialization, the need for patience, and a sharp focus on returns.
All four CIOs said emerging managers need to punch above their weight if they’re going to catch a pension fund’s attention.
“It’s well-established in the academic literature that small or newer managers, for whatever reason – hunger, motivation – tend to produce some pretty persistent alpha over the years,” Florida SBA’s Ash Williams said.
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