CalPERS next CIO: 55 applications so far and counting

CalPERS has already had 55 applicants for its vacant CIO position, far more than the same point in its last recruitment drive to fill the position and with the advertisement only recently gone live.

The $461.8 billion pension fund’s last two CIOs, Ben Meng and Nicole Musicco, each lasted in the post for about a year and a half, with Musicco announcing her resignation in September. CalPERS hopes to onboard a new CIO in early 2024 and has budgeted $300,000 for the hunt, including all search fees.

“The number of people reaching out to us is higher quality [than last time],” said Charles Dore, founder of global executive search group Dore Partnership, which also assisted in placing Musicco and is hunting for potential candidates at asset owners, GPs and asset managers; unearthing people on career breaks and rising CIOs.

“We are quietly enthusiastic about the quality and diversity in the field. The quantity and quality of people reaching out to us is refreshing.”

The search comes during a very competitive time in the financial industry with CIO openings at several high-profile organisations.

A specially convened CIO selection sub-committee went through the long list of skills the role requires, top of which sits relevant investment experience. CalPERS’ next CIO must have a track record of investing capital, able to identify where they’ve added value and what they’ve learnt from hands-on investment.

But in a reflection of both the deeply political organisation and the strategic role of many CIOs, a wish-list of other accomplishments comes swiftly on the heels of investment expertise. The sub-committee stressed the importance of CalPERS next CIO being an adept leader, a skill that demands more than simply managing people. It requires inspiring all stakeholders, bringing out the best in each person and helping build a pipeline of talent so that when the pension fund comes to recruit, it can tap high-quality internal candidates.

“We want someone who can see themselves at CalPERS for years to come,” said CEO Marcie Frost.

Under that same leadership banner, the sub-committee is hunting for a candidate with cultural competence to navigate and rally the pension fund’s many diverse stakeholders and constituents. “Leadership also means an ability to effectively listen,” added sub-committee member Lisa Middleton.

Communication skills are also vital – particularly the ability to explain “the why” so that everyone understands the reasoning behind a decision, even if they don’t agree with it.

“There are times we are going to be divided,” said Frost.

Leadership requires emotional intelligence, the ability to read the room; present in a way that doesn’t cause a furore or that is insensitive to CalPERS diverse culture. The board would also like the new CIO to agree to receiving mentorship.

Another essential attribute is fitness for public role – an aspect of the highly visible job that turned out to be a “surprise” to previous incumbents despite the rigorous interview and onboarding process. This  requires an ability to sift through “what matters and what doesn’t” and not let criticism get in the way of the job. CalPERS doesn’t want someone in the media on a weekly basis, but when it has a story to tell it will “get the CIO out there” to talk on strategy, said Frost.

Applicants should have a keen sense of mission. CalPERS is a “mission first” organisation where the welfare of the two million Californian workers the pension fund serves is front and centre. This requires energy, innovation, resilience and humility.

The search process is global, systematic and reference driven and candidates that apply direct, as per CalPERS’ own policies, will go through the same process as those hunted down by Dore. The reference-led process includes both formal and informal references and the offer phase is followed by a multitude of 30-40 checks including background and reference checks; credit checks, social media checks, and criminal and federal background checks.