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CalPERS hires Washington State chief for CIO post

Joseph Dear, former executive director of the Washington State Investment Board, will become CIO of the US' largest public pension plan following the departure of Russell Read last June. The hire puts an end to speculation that the CIO role would be filled by Carlyle venture veteran Bob Grady.

The California Public Employees’ Retirement System has named Washington State Investment Board’s executive director, Joseph Dear, as chief investment officer.

Joseph Dear

Dear held his post with the WSIB since 2002, where he oversaw $67 billion across 39 funds. As of 30 June, WSIB had $13.8 billion of total assets committed to private equity and $8.7 billion committed to real estate.

Prior to joining WSIB, Dear was government relations officer for Tacoma, Washington-based investment firm Frank Russell Company. He was earlier chief of staff to Washington governor Gary Locke.

In March, Dear will replace Russell Read, who departed the $178 billion state pension fund on 30 June to pursue cleantech and environmental investing. Media reports in recent months speculated that the frontrunner to fill Read's role was Robert Grady, chairman of the Carlyle Group's growth capital arm, Carlyle Venture Partners. 

Dear will assume responsibility for the pension's 220 investment professionals and support staff, who invest across asset classes including private equity, real estate and infrastructure.

CalPERS veteran Anne Sausboll had been acting as interim investment officer since Read left. She was formerly the pension’s chief operating investment officer and was last month appointed chief executive officer.

At the top of Dear’s agenda will likely be tackling the impact of the denominator effect on CalPERS. Last month, the pension considered temporarily increasing its target allocation range to private equity and real estate in an attempt to combat an increasingly overweighted alternatives portfolio.

CalPERS staff recommended that the pension increase the upper limit of its target allocation to alternative investment managers, including private equity and hedge funds, from 13 percent to 18 percent.

As of 31 October, CalPERS’ actual allocation to its alternatives programme stood at 13.8 percent, well above its policy target of 9.5 percent.

CalPERS staff also recommended bumping the upper limit of its target real estate allocation from 13 percent to 15 percent.