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Dear, battling cancer, steps back at CalPERS

Theodore Eliopoulos, CalPERS’ senior investment officer for real assets, has stepped in as acting CIO as Joe Dear battles prostate cancer.

Joe Dear, the chief investment officer of the biggest pension system in the US, the California Public Employees’ Retirement System (CalPERS), is receiving treatment for prostate cancer, according to a CalPERS’ spokesperson. Theodore Eliopoulos, CalPERS’ senior investment officer for real assets, will take over as acting CIO for day-to-day operations. “He’ll be serving double duty while Joe is receiving treatment,” the spokesperson said.

Eliopoulos assumed the acting CIO role within the past month, the spokesperson said. He has worked in his position as head of real assets since 2007, overseeing CalPERS’ $22 billion real assets portfolio. He directs the system’s real assets staff of more than 40, as well as more than 60 external advisors responsible for investing in and managing all CalPERS’ real assets investments, which include its $19 billion real estate portfolio and $3 billion in investments in forestland and infrastructure, according to a biography provided to sister publication Private Equity International.

Several investor relations sources who attended PEI’s 2013 Investor Relations & Communications Forum in New York last week expressed sympathy and characterised Dear as one of the “nicer guys” in the industry. Dear, meanwhile, continues to work both from the office and from home, the spokesperson said.

Big changes
Dear's tenure at CalPERS has been anything but dull. He joined CalPERS in 2009 from the Washington State Investment Board, where he had worked as executive director since 2002. Prior to Washington State, Dear was government relations officer for Tacoma, Washington-based investment firm Frank Russell Company.

Dear, who replaced former CIO Russell Read, came to CalPERS in 2009 at a time when the system had suffered its steepest single-year loss in its history. The system also became embroiled in a nationwide public pension pay-to-play scandal that year.

Under Dear's leadership, CalPERS restructured the way it manages private equity relationships, created a risk management office and a whistleblower hotline, instituted rigorous travel and gift guidlines for staffers and prohibited firms that serve as investment consultants from also managing money for the system. CalPERS also managed to win millions of dollars in fee breaks from various managers, including Apollo Global Management.

Dear has come into the crosshairs of advocates for the emerging manager community, who feel that CalPERS is pursuing a policy of committing more money to fewer, larger managers and ignoring the emerging manager community, for which the system has long served as an anchor investor. He has spent time defending CalPERS record on emerging manager investing and has publicly affirmed the system's support for the strategy. 

Dear has been an advocate for a better alignment of interest between LPs and GPs in the form of lower fees. The changes he has brought about – and his views and advocacy – haven't necessarily won him many friends in the industry, then again CalPERS has come a long way from the dark days of the global financial crisis.