He will become CalPERS’ fourth CIO in just over five years, replacing Nicole Musicco, Ben Meng, and Ted Eliopoulos.
The California Public Employees’ Retirement System (CalPERS), the largest pension fund in the United States with $494.6 billion in assets, has named Stephen Gilmore as its new CIO, succeeding Nicole Musicco, who will leave in September 2023.
The CalPERS board announced Gilmore’s appointment on Tuesday, which will take effect in July. He will become CalPERS’ fourth CIO in just over five years, replacing Nicole Musicco, Ben Meng, and Ted Eliopoulos.
“Stephen has worked in very public roles throughout his career for organizations that value transparency and resilience,” said CalPERS CEO Marcie Frost in a statement. “He brings not only a wealth of investing knowledge to the job, but he also has the temperament to understand the needs of our members and public sector employers who depend on CalPERS to be a steady, long-term partner.”
Gilmore, a member of the CIO Power 100 list of the world’s finest asset allocators, will step down as CIO of the Guardians of New Zealand Superannuation, which oversees the New Zealand Superannuation Fund. He has held the position since 2019.
He is a New Zealand native who previously served as chief investment strategist at the Future Fund, Australia’s sovereign wealth fund, and has worked for the International Monetary Fund and various banks, including Morgan Stanley, Chase Manhattan, and the Bank of New Zealand.
CalPERS and the post of CIO at the fund have frequently been described as highly political, with the incumbent having to navigate relationships with the state legislature and a 13-person board of member-elected and political appointments. In comparison, NZ Super believes in robust governance, stating on its website that “clear governance and decision-making structures that promote efficiency and accountability are effective and add value to the fund.”
As of February 29, NZ Super, New Zealand’s sovereign wealth fund, which oversees $73 billion ($43.53 billion), has returned 9.27% over the previous five years, closely equal to Gilmore’s term. Over the last 12 months, the fund has returned 16.04%.
According to CalPERS’ most recent fiscal year report, the one- and five-year annualized returns as of June 30 were 5.8% and 7.1%, respectively.
NZ Super’s portfolio includes 43% global equities, 24% debt instruments, 10% alternatives, 5% rural and wood, 4% New Zealand shares, 4% private equity, 4% infrastructure, and 4% property.
As of February 29, CalPERS’ portfolio was divided as follows: 45.5% global equities, 26.1% fixed income, 13.7% real assets, 14.3% private equity, 3.5% private debt, and 3.2% other asset classes.
“Stephen has made a significant contribution to the sophistication of the NZ Super Fund since he joined us in early 2019, a period during which the Fund has grown by more than $30 billion, nearly doubling in size,” according to a statement by Paula Steed, NZ Super’s CEO. “He has championed the role of new technologies in allowing improved investment decision-making, introduced innovative and disciplined thinking to our investment processes, and, as Chair of our responsible investing strategy refresh, has been critical to our transition to a more sustainable investment approach.
These long-term adjustments have better positioned us to manage the Fund’s ongoing development.”
CalPERS launched its search for a new CIO in October 2023, with executive recruitment company Dore Partnership leading the effort. The fund conducted an initial round of interviews in January and a second round in February. According to a source, there were four finalists, all from outside the organization.
According to CalPERS, Gilmore’s yearly pay is $718,750, excluding performance bonuses.
Gilmore earned a Bachelor of Commerce and a Master of Commerce in Economics from the University of Canterbury in Christchurch, New Zealand.
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