OCTOBER 21, 2024 | PIONLINE.COM | $16 AN ISSUE / $350 A YEAR
S P E C I A L R E P O RT D C M U T UA L F U N D S / TA R G E T- DAT E F U N D S
Managers rode market wave to 17.4% rise in DC plan assets Mutual fund AUM reaches $4.2 trillion for DC plans; target-date funds up 24.6% B y ROB KOZLOWSKI
Pension Funds
Scott Chan has some big shoes to fill at CalSTRS New CIO of the $346.5 billion fund plans to begin with bolstering investment staff and adding portfolio resiliency B y ARLEEN JACOBIUS In the three months since new CalSTRS CIO Scott Chan took the wheel of the $346.5 billion pension plan, he has largely stuck to the same route plotted out over the last few years while preparing for a possible default cycle and volatility.
Chan has been at the California State Teachers’ Retirement System, West Sacramento, for six years, serving as deputy chief investment officer before he assumed the CIO post on July 1, following the retirement of long-standing CIO Christopher Ailman. “It’s an exciting adventure,” said Chan in an interview. “I couldn’t be more excit-
ed and energized.” Chan’s team and the board will spend this fiscal year crafting a shared vision on creating more value alongside its existing collaborative model, net-zero plans and diversity programs. CalSTRS is facing a less accommodative investment environment with political and war risk among challenge. But Chan said CalSTRS’ liquidity and rebalancing tools — including leverage and wider bands around asset class targets SEE CHAN ON PAGE 28
Providers of mutual funds and target-date funds for defined contribution plans saw their assets under management post impressive double-digit percentage increases for the year ended June 30, during a year when markets even outperformed the previous year’s spectacular numbers. For the 12 months ended June 30, the annual survey conducted by Pensions & Investments found that proprietary mutual fund AUM increased 17.4% to $4.2 trillion. The previous year saw AUM rise by 6.5%. Meanwhile, proprietary target-date AUM posted an increase of 24.6% in the year ended June 30 to $3.29 trillion, a faster pace than the 12.1% increase the previous year. Among target-date funds, those using mutual funds posted a 16.9% gain in AUM to $1.36 trillion, while those using collective investment trusts posted an 18.1% gain in AUM to $1.48 trillion. The rise in AUM across all categories reflected an extremely strong equity market for the period. For the year ended June 30, the Russell 3000 returned 23.1%, above the equally impressive return of 19% for the year ended June 30, 2023. Greg Ungerman, senior vice president and leader of the defined contribution practice at Callan, said his firm saw for the first time this past year that collective investment trusts are now more prevalent than mutual funds in the Gary Pope
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Alternatives
Fairview Capital looks back on 30 years of innovation with an eye to the future B y CARYL ANNE FRANCIA There’s a message that JoAnn Price conveys to employees as they start at Fairview Capital Partners: “Bring all of your gifts and talents to the table.” “Now it may take some time because everyone has a different personality to be able to do that, but over time, that does happen,” she told an audience of industry peers in September. “We want people to really present and be comfortable with their talent because that’s why
they’re there, and that’s why we’ve chosen them to be there.” That drive for inclusion and belonging has helped build Fairview, co-founded by Price and Laurence Morse, into a $10.8 billion private equity and venture capital fund-of-funds manager that, in turn, is leaving a positive effect on the industry itself. Since it founding 30 years ago in September, the minority-owned firm has sought to deploy and grow capital through co-investments, SEE FAIRVIEW ON PAGE 30
CELEBRATION: NAIC’s Robert Greene, left, with Fairview’s JoAnn Price and Laurence Morse
SOUND BITE Ten years after a messy breakup with PIMCO, BILL GROSS says he was “never a king in my mind — always insecure and happy only when the previous day’s performance showed positive ‘alpha.’ ” Page 2
BlackRock still King of the World The P&I/Thinking Ahead Institute’s annual look at the world’s largest managers begins on Page 14.