Read Succeeds Anson at CalPERS

Institution: The California Public Employees’ Retirement System

New CIO: Russell Read

Former CIO: Mark Anson

Assets Under Management: $208 billion

Allocation to PE: 5.1 percent

Following an almost six-month search, The California Public Employees’ Retirement System (CalPERS) has brought in Deutsche Asset Management vet Russell Read to serve as the chief investment officer of the $208 billion pension. Read is succeeding Mark Anson, who departed from the pension this past October to join London-based institutional fund manager Hermes Pensions Management.

CalPERS has experienced a significant amount of turnover in recent years. Anson had taken the job in 2001 to replace Barry Gonder, who himself had absconded to Grove Street Advisors. Meanwhile, Rick Hayes, a senior executive at the pension and former head of its alternatives group, left to join Oak Hill Capital Management last June, while Panda Hershey, another top exec, departed this past February, signing on with TIAA-CREF.

Anne Stausboll has been serving as the interim CIO at CalPERS, which had hired executive search firm Fiderion Financial Services to lead the search for Anson’s permanent replacement.

Read is scheduled to assume the CIO post on June 1. Prior to his new role, Read had served as the deputy chief investment officer for Deutsche Asset Management. Before that he had worked at Zurich Scudder Investments, where he had managed the global quantitative investments and research at the firm. Read also held senior positions at OppenheimerFunds, Prudential Insurance, First Chicago, and other institutions. At Oppenheimer, Read had at one time been Mark Anson’s superior, according to reports.

His experience has largely been focused on the public markets, with little in the way of direct private equity exposure. A press release issued by the pension noted that Read has spent more than 20 years in investment management “across all asset classes,” but specifically cited his background in “global markets, asset/liability modeling, asset allocation [and] risk management.”

Read’s charge at CalPERS will be to manage the pension’s entire portfolio, which includes equities, fixed income, real estate and alternative assets.

Brad Pacheco, a spokesman for the pension, told Buyouts that even as Read does not have a significant background in private equity, that shouldn’t “lead to assumptions about [CalPERS’] portfolio asset allocation.”

The pension’s Alternative Investment Management Program, headed by Leon Shahinian, currently makes up slightly more than five percent of the pension’s $208 billion in assets under management. Shahinian was appointed to the role of senior investment officer by Anson in 2004.

The change at the top comes as CalPERS is undergoing a dramatic makeover in its approach to private equity. At the end of March, CalPERS issued two mandates seeking third-party assistance in simplifying its rambling portfolio. The pension issued one RFI requesting bids to develop a “customized fund of funds” that will give the pension access to distinct market segments such as mid-market, venture and global managers. The second mandate issued was an open call for “one or more third parties” to take over certain partnerships in its portfolio. The pension concluded that the “number of general partner relationships… needed to be reduced to a more manageable number.”

“Leon Shahinian runs the private equity portfolio, and I don’t see any immediate or even future changes in the strategic plan that has been set forth,” Pacheco said.