Pension System: Massachusetts Pension Reserves Investment Management Board
Assets Managed: $49.2 Billion (July 31, 2012)
Private Equity Assets: $5.9 Billion (July 31, 2012)
Private Equity Allocation (Target): 12% (10%) – (July 31, 2012)
Chief Investment Officer: Michael Trotsky (Interim)
Trotsky has been serving as interim chief investment officer since last June following the departure of Stanley Mavromates Jr., who left the pension after 12 years to join Mercer LLC, the Marsh & McLennan-owned consulting firm, as its chief investment officer.
MassPRIM, as it is commonly known, has experienced a staffing black hole in the last two years after several high-ranking investment officers, in addition to Mavromates, have bolted for the private sector.
Among the reasons cited for the slew of recent departures is the comparatively low compensation at MassPRIM when compared the private sector. As executive director, for instance, Trotsky earns just $245,000, plus the possibility of a small bonus. That would likely be bumped to $295,000 if he ultimately were to take on the additional role of chief investment officer.
Filling the CIO role is thought to be particularly important because other senior investment staff recruits could be hesitant to sign up without knowing who their eventual boss would be. The decision to name Trotsky as MassPRIM’s chief investment officer would likely reduce any potential reluctance that recruits might have and allow the roles to be filled more rapidly.
Key among the vacancies that need to be filled are the two top positions in the private equity group. The pension has nearly $6 billion in invested private equity capital, but without a private equity chief, the pace of new commitments has been slow. MassPRIM has been without a chief of private equity since July 2011, when Wayne Smith left to join Pathway Capital Management, a fund of funds firm. Smith’s deputy, Michael Langdon, left in September 2011 to join Hermes Global Private Equity, leaving MassPRIM’s private equity team with only its two most junior staff members.
Trotsky has been with MassPRIM for just two years. His predecessor, Michael Travaglini, left in 2010, complaining that the fund underpaid its top executives.