Jimmy Levin, chief investment officer of Sculptor Capital Management, will become CEO next April — over three years after founder Dan Och stepped down.

Levin will succeed Robert Shafir, who joined the firm formerly known as Och-Ziff Capital Management as CEO in February 2018. In a statement Wednesday, Sculptor said Levin was also expected to be elected to the hedge fund firm’s board of directors at its annual shareholder meeting later this month.

“Jimmy is the right person to lead Sculptor Capital and his appointment is a natural evolution of the company’s senior management team,” Shafir said in a statement. “During Jimmy’s 14 years at the company he has proven to be an exceptional investor and a sturdy leader through market cycles. I am confident that Jimmy and the talented team at Sculptor Capital will take the company to greater heights.”

Levin, who first joined Sculptor in 2006, has long been marked for the CEO role: Och told...

When Kane Brenan was hired as TIFF Investment Management’s new president, he made a plan.  

He was going to spend his first week at TIFF’s Radnor, Pennsylvania office, getting to know his new colleagues. Then, he’d hit the road, spending the next month meeting with TIFF’s nonprofit clients across the country.  

“One, it gives you fodder to make changes,” Brenan said on his plan to meet with clients. “But also, you are kind of a blank slate. You can go and listen and learn.” 

The Covid-19 pandemic, though, derailed that plan. Brenan’s first day at the firm was April 13, just days after Pennsylvania’s new coronavirus cases peaked. All travel was put on hold, and Brenan’s first day was conducted from his family’s home.  

“It’s actually gone much better than I feared in mid-March,” Brenan said by phone Monday. “I couldn’t imagine not being in the office.”  

Brenan, who previously...

In the first four months of the year, active managers got the opportunity they wanted to show investors that they can beat their benchmarks in periods of market volatility. So how did they do?

Not well, according to new research.

“Early 2020 results rebut the view that active funds navigate market turmoil better than index-based funds,” wrote Berlinda Liu, director of global research and design at S&P Dow Jones Indices, in a blog post published Wednesday. “Even where results are relatively favorable, the data show the difficulty of market timing. Mixed results in the short term did not change active funds’ tendency to underperform indices over the long term.” 

[II Deep Dive: Here’s Where Active Management Actually Works]

S&P Dow Jones Indices publishes two scorecards each year, reporting how active managers performed compared with their benchmarks. Given the record volatility in markets since the...

Asset management professionals make more money over their entire careers than workers in other fields — including other areas of finance.

New research documenting lifetime incomes of employees in finance, manufacturing, and technology finds that finance wages start out high and increase at a much steeper rate than pay in other fields. Much of this “career premium,” however, is concentrated in asset management jobs, according to Indiana University professor Andrew Ellul and Marco Pagano and Annalisa Scognamiglio of the University of Naples Federico II.

“While asset managers enjoy a large career premium and no commensurate career risks, the opposite applies to banking and insurance employees,” they wrote in a paper on the findings.

The researchers analyzed the resumes of nearly 10,000 individuals who worked in finance, manufacturing, or technology at some point between 1980 and 2017. They found that more than 80 percent of workers who...

Recent global and market events have seen defined contribution (DC) plan participants grow nervous, and DC plan sponsors perhaps looking for answers to questions from nervous investors. Those invested in stable value funds, however, might be less stressed. Stable value funds are offered primarily through employer-sponsored retirement plans, and are designed to be resilient and preserve principal. With $808 billion in AUM at the end 2019, stable value represents more than 10% of the $7.8 trillion U.S. defined contribution market, according to the Stable Value Investment Association. Approximately 75% of retirement plans offer a stable value option,1 among them those managed by Vanguard, which has a particular expertise in the area. Currently, 64% of DC plans on Vanguard’s platform offer stable value.2II recently spoke with Patricia Selim, Head of Stable Value Investments at Vanguard, to gain more insights on why the firm’s stable value funds can help...

Has the economy reached a turning point? Institutional investors seem to think so.

Asset managers and allocators surveyed for the II Fear Index reported a sharp increase in optimism this week regarding the economic prospects of their countries. Thirty-six percent said they felt more optimistic this week compared with the previous week — a 12-percentage-point jump from last week’s index. 

It’s the highest increase in optimism recorded by the II Fear Index so far, and the first time that optimistic responses outweighed pessimistic responses. Among this week’s 170 respondents, 28 percent felt less optimistic this week about their economic prospects, while 35 percent felt the same as last week.

Less than two weeks after Amy Cooper — the now-former head of insurance solutions at Franklin Templeton — got fired for calling 911 on a black birdwatcher in Central Park, another clip went viral.  

The video, which emerged on Twitter Thursday evening, depicts a white man in a bike helmet and sunglasses, who grabs a young girl’s wrist, wresting papers from her hands. She was hanging signs in a park in support of the Black Lives Matter movement. He then gets his bicycle and runs toward the person filming him, who appears to fall to the ground.  

As in the Cooper case, amateur online detectives set to work trying to identify the man in the video. They quickly zeroed in on a suspect using Strava, a cycling app where users share stats, including maps of where they’ve ridden.  

It seemed like another Amy Cooper was about to emerge: the person they found and named also worked in finance.

But they had the...

Investors should explore the “dark side” of responsible investing, going beyond the common tactic of simply avoiding stocks for environmental, social or governance reasons, according to Man Group.

“Why not short them?” asked Rob Furdak, Man Group’s chief investment officer for ESG, in a phone interview. “You get more exposure to things that matter to your set of values.”

Exclusionary screening of companies — the most prevalent way investors express their ESG views — may be costing them returns, according to research done by Man. But long-short strategies may pay off. Long bets on companies with, say, strong board diversity may help increase gains, he suggested, while shorting companies lacking diverse leadership may provide even more return.

Shorting stocks as an ESG strategy is not common, partly because some asset owners have policies prohibiting betting against companies, according to Furdak. He said some institutional investors...

Less than two weeks after Amy Cooper — the now-former head of insurance solutions at Franklin Templeton — got fired for calling 911 on a black birdwatcher in Central Park, another clip went viral.  

The video, which emerged on Twitter Thursday evening, depicts a white man in a bike helmet and sunglasses, who grabs a young girl’s wrist, wresting papers from her hands. She was hanging signs in a park in support of the Black Lives Matter movement. He then gets his bicycle and runs toward the person filming him, who appears to fall to the ground.  

As in the Cooper case, amateur online detectives set to work trying to identify the man in the video. They quickly zeroed in on a suspect using Strava, a cycling app where users share stats, including maps of where they’ve ridden.  

It seemed like another Amy Cooper was about to emerge: the person they found and named also worked in finance.

But they had the...

Investment firms had earned their clients’ approval through the Covid-19 crisis, even before markets dramatically bounced back, State Street found in new research. 

Three-quarters of 250 institutional investors surveyed in April said they have faith in their managers’ ability to navigate the fraught situation, with a similar portion reporting strong communication and support from those service providers. 

[II Deep Dive: The Dirty Secret of Asset Management: It’s Doing...Okay?]

Most of the polled investors did not anticipate a swift, V-shaped recovery this year. Two out three said that economic activity would return to full strength in 2021 or later. 

Stock markets, of course, have bounced back far faster than that. The S&P 500 index was less than 200 points away from all-time highs on Tuesday afternoon, while the Nasdaq Composite flirted with the 10,000 threshold. 

Yet polled allocators professed...

Nearly all private equity managers expect to see a surge in distressed fund deals over the coming year, according to a new survey.

The poll, commissioned by fund service firm Intertrust Group, found that 92 percent of private equity professionals across North America, Europe, and Asia believe distressed fund activity will increase in the wake of the coronavirus pandemic, which devastated businesses in the U.S. and elsewhere. Likewise, private equity managers viewed distressed funds as the biggest fundraising opportunity in the near future, with 83 percent indicating there would be more investor demand for strategies targeting distressed assets.

This sentiment is already being borne out at major private equity firms. Last month, Apollo Global and KKR & Co. said they raised $1.75 billion and $4 billion, respectively, for credit funds focused on “dislocation” resulting from the Covid-19 crisis. Both funds were raised in just 8...

Many U.S. asset managers are seeking to “emulate” firms that convert data into strategic insights that help them win business, according to Cerulli Associates.

“In the age of big data, the ability to mine a constant stream of information and research databases is table stakes for most major asset management firm in the U.S.,” Cerulli, a consulting and research firm, said in a report Monday. Eighty percent of those surveyed by the firm said expanding data analytics to improve sales was a priority — with half identifying it as a “major priority.”

Firms like BlackRock and Fidelity “lead the way in terms of the large data teams they employ,” Cerulli said. Ninety-six percent of firms with at least $20 billion of assets have data analytic teams, the consulting firm found, noting that Goldman Sachs Group and Legg Mason in 2018 created chief data officer positions.

“It is clear that there is a sea of information at these managers’ disposal,”...

When making his case for the government to rescue the oil industry, Wil VanLoh wanted Texas regulators to know that at heart he was a free-markets kind of guy. “I am a free-market person through and through,” the founder of private-equity firm Quantum Energy Partners told the Railroad Commission of Texas — the regulatory body that oversees the state’s oil and gas industry — at a mid-April meeting. 

Yet VanLoh was pleading with the commissioners to temporarily limit oil production, warning their inaction would lead to widespread failure of small and midsize oil companies. The reduced supply, he hoped, would raise the value of the oil taken from the ground if done in coordination with other U.S. states. 

“We don’t live in a world of free markets,” he lamented, pointing to the massive government intervention during the 2008 financial crisis. “The system of capitalism the world now works under is one where the markets are generally...

In the last financial crisis, private equity firms that quickly put money to work in struggling companies generated the best returns when the economy recovered. That’s not lost on the current crop of private equity buyers in the current Covid-19 crisis — but what’s happening on the ground reveals a deal-making process that is long and drawn out. 

Eva Davis, managing partner of the Los Angeles office and co-chair of the private equity practice at law firm Winston & Strawn, said one of her clients, a buyer, finally closed on a $100 million deal in June that was originally agreed on at the end of February. The deal required the buyers to update due diligence multiple times, as the underlying business was changing significantly in terms of both demand and supply over the negotiation period. 

As an example of the complexity in the new environment, Davis pointed to a negotiation around an earnout, or an earnings target that a seller...

St. Louis-based health care system Mercy is dissolving its in-house investment team to hand over the vast majority of its portfolio — more than $2 billion — to a little-known wealth manager with deep ties to Mercy’s board chair, according to three informed sources. 

The deal radically departs from many industry norms and best practices, experts say. “It raises a lot of questions,” outsourcing specialist Anna Dunn Tabke of Alpha Capital Management said in a Friday interview. 

Those questions remain unanswered for many stakeholders. Mercy officials did not respond to messages. Institutional Investor briefly reached the wealth manager’s co-head Geraldine McManus by phone, but she immediately hung up and would not answer subsequent inquiries. 

Mercy dismissed its longtime chief investment officer late last year, saying only that his services were no longer needed. That was the first in a series of swift and striking moves to...

The Presbyterian Church’s Board of Pensions has named a new chief investment officer to replace Judith Freyer, who announced her retirement in March.  

The $9 billion pension fund said on Thursday that Donald Walker III, who had been working as deputy CIO, has been promoted into that role.  

Walker will begin working as CIO on July 1, and Freyer will step down in July, according to the announcement.  

“Judy’s diligent stewardship throughout more than 30 years has greatly benefited thousands of Benefits Plan members, retirees, and their families,” said the Rev. Frank Clark Spencer, president of the Board of Pensions, in a statement. “For nearly half that time, Don has been at her side.” 

Spencer added that Freyer has mentored Walker through the years. Walker joined the pension fund in 2006 and was promoted to managing director of investments in 2011. He was named deputy CIO in 2016, the...

Investors have paid hundreds of billions in fees to private equity managers over decades, minting tens of billionaires in the process — but for more than a decade, private equity returns have matched those an investor would have gotten by investing in publicly traded stocks, according to new research.

Ludovic Phalippou, professor of financial economics and head of the finance, accounting and management economics group at the University of Oxford Said Business School, made that conclusion in a paper entitled “An Inconvenient Fact: Private Equity Returns & The Billionaire Factory,” to be published next week. 

Speaking during a webinar on Thursday hosted by the International Centre for Pension Management, Phalippou said that from 2006 to 2019, private equity generated a multiple of 1.5 times, meaning investors received 1.5 times their original investment. A multiple of 1.5 equates to an 11 percent return — in line with public stock...

Russell Investments’ lease on its New York office is up in September, and the firm has no new office space ready to go. 

But, according to the firm, it wants to find a new spot in the city.  

Before the Covid-19 pandemic, the investment manager’s New York staff occupied the 14th floor of 3 Bryant Park in Manhattan, the same building that houses tech giant Salesforce. Now, Russell’s employees are working from home, and the September 30 deadline is looming.  

Russell, in some ways, is in an enviable position as far as finance firms in New York go: a lease expiration could cut costs significantly. And it’s not unprecedented for finance firms to move amid crises. 

“I’ve seen a lot of different downturns and problems with New York real estate,” said Michael Colacino, president of SquareFoot, a New York-based commercial real estate company.   

After 9/11 and the dot com bubble burst,...

Many hedge fund firms initially underestimated the threat of the coronavirus. Cinctive Capital was not one of them. 

Cinctive, founded by Diamondback Capital Management veterans Larry Sapanski and Richard Schimel, launched in September with backing from PAAMCO Launchpad, the joint venture between the Employees Retirement System of Texas and investment firm PAAMCO Prisma to seed and support emerging hedge fund managers. Cinctive, headquartered in New York City’s Hudson Yards, is a long-short equity fund using a multi-manager approach, with numerous investment teams covering roughly half a dozen sectors. 

One of those teams — a technology team focused on semiconductors and software — started looking into supply chain disruptions in China early this year. The team talked to factory workers and company managements based in China and shared their findings with Cinctive’s other sector teams. 

The semiconductor team was...

In 1988 the U.S. Department of Labor built a windowless, cinderblock room in the bowels of its limestone headquarters in Washington, designed for one purpose: to lock up journalists.

The room — which now sits silent and unoccupied — is minimalist and penal, with industrial-grade carpeting, government-issued chairs, rows of homogeneous computer workstations, a single door, and a metal detector outside. The one indulgence is a large, atomic clock on the wall, set to the military time of the U.S. Naval Observatory. 

“As I recall, it was always too hot or too cold in there,” says Carl Fillichio, who held senior roles in public affairs at the Labor Department for a combined 13 years under both the Clinton and Obama administrations. “It’s painted a horrible, nondescript beige. And on jobs day there is an armed guard outside. You know what it really looks like? It looks like the room where prisoners go to talk to their...

Citigroup has named Muir Paterson to lead a newly formed strategic advisory group as part of a data science push for its banking, capital markets, and advisory teams.

Strategic Advisory Solutions will bring together the bank’s financial strategy, shareholder advisory, and data science groups, Paterson said in a phone interview. He joined Citi from Goldman Sachs Group in 2017 to lead the strategic shareholder advisory practice within its mergers and acquisitions unit.

Under the reorganization, Paterson says the data science effort he helped build around his role advising companies on how to defend themselves against activist hedge funds will become a more integral part of Citi’s other businesses. He is working with Ajay Khorana, the head of the bank’s financial strategy group, to make data science a stronger part of its corporate finance advice.

“Insight into what’s going on with your investor base is becoming increasingly important,”...

In 1988 the U.S. Department of Labor built a windowless, cinderblock room in the bowels of its limestone headquarters in Washington, designed for one purpose: to lock up journalists.

The room — which now sits silent and unoccupied — is minimalist and penal, with industrial-grade carpeting, government-issued chairs, rows of homogeneous computer workstations, a single door, and a metal detector outside. The one indulgence is a large, atomic clock on the wall, set to the military time of the U.S. Naval Observatory. 

“As I recall, it was always too hot or too cold in there,” says Carl Fillichio, who held senior roles in public affairs at the Labor Department for a combined 13 years under both the Clinton and Obama administrations. “It’s painted a horrible, nondescript beige. And on jobs day there is an armed guard outside. You know what it really looks like? It looks like the room where prisoners go to talk to their...