Christopher Ailman, chief investment officer of the California State Teachers’ Retirement System, will be honored with Institutional Investor’s Lifetime Achievement Award at the first annual Allocators’ Choice Awards on November 28 in New York.
Ailman, who first joined the $213 billion public pension fund as CIO in the fall of 2000, has more than three decades of experience in investment management, having served in the public sector since 1985. He spent 11 years in Sacramento County, where he managed investments for both the county and employees’ retirement systems, before moving to the Washington State Investment Board, where he served four years as CIO of the then-$57 billion fund.
During his 17 years at CalSTRS, Ailman has grown the portfolio from $116 billion to more than $200 billion, making it the country’s second largest public pension, while more than quintupling the fund’s staff to 150 employees in order to manage roughly half of its assets internally.
“When I got here, I told the staff my vision was to make us a world class money manager,” Ailman said. “We were a pretty quiet, mom-and-pop kind of shop. I wanted to grow the internal management and really put us on the map as an institutional investor.”
By many measures, Ailman has succeeded: The “quiet, sleepy fund just starting to consider high-yield bonds” is now a well-diversified, sophisticated investor with a strategic asset allocation targeting sizeable investments in private assets and what the fund dubs “risk-mitigating strategies.” Ailman and his team at CalSTRS have been the recipients of numerous accolades over the years, including the peer-voted Richard Stoddard Award for service in the investment of public pensions, which Ailman won in 2003. “That coming from your peers really means a lot,” he said.
Under Ailman’s leadership, CalSTRS has also become a force to be reckoned with in shareholder activism, leading the charge on environmental, social, and governance issues including climate change and shareholder voting rights. Over the last year, CalSTRS has become a prominent proponent of gender diversity, seeding State Street’s new SHE Index and launching Beyond Talk, a workshop to advance women in financial leadership roles.
CalSTRS certainly walks the walk: Ailman estimated that his team is split almost evenly between men and women, with a senior staff that’s roughly two-thirds female. Additionally, around 40 percent of staff members are people of color. “Probably the biggest thing that I’m proud of is our staff,” Ailman said. “It is really diverse, and really different from the rest of the industry.”
Working in the public sector has come with its challenges – Ailman acknowledged that working at a state pension plan has often meant discarding innovative investment ideas that simply couldn’t work within their governance structure. Yet Ailman is not tempted to stray to the typically more lucrative private sector, explaining that he decided a long time ago what he stood for as a person.
“I’m a Christian, a Husband, a Father, and then a chief investment officer,” he said. “I try to make my life decisions in that order.”
And Ailman has no plans to hang up his CIO cap anytime soon. One of his top goals going forward is to continue to integrate ESG risk analysis into CalSTRS’ investment process, while driving home the importance of ESG as a long-term investing issue to the broader institutional community.
“We’re a big fund, we’re looking for big waves we can ride for a long time,” he said. “The change in climate is a huge wave, one that will probably last 50 years or longer. It is both a risk and an opportunity.”
Ailman also looks forward to further growing the CalSTRS investment staff, focusing on leadership development programming for the younger investors who Ailman and his senior colleagues will eventually pass the baton to.
“We have a very strong culture with the investment staff, one that we want to maintain,” he said. “We need to do a good job of succession planning to sustain our performance for the future.”
The Lifetime Achievement Award will be presented at dinner at the Mandarin Oriental in New York City, following an afternoon Masterclass of discussion among an exclusive group of asset allocators and managers, where attendees will share, debate, and tackle institutional investing’s intractable problems.
Other awards to be presented at the Allocators’ Choice Awards will include “Turnaround of the Year,” “Investment Committee/Board of the Year,” and “Partnership of the Year,” for which CalSTRS is also nominated for its partnership with State Street.
Winners will be chosen by peer voting, which is currently underway. Allocators can request an invitation to the Masterclass and dinner.
