Few municipalities adapt to change as well as New York City. However, the revolving door at the city’s $95 billion pension makes keeping track of its leadership increasingly difficult. The New York City Retirement Systems (NYCRS) has now had four people man the role of chief investment officer in the past three years.
Deborah Gallegos was the latest to leave the pension. Money Management Letter first reported on Gallegos’ departure in February, and quoted NYCRS spokesman Jeff Simmons as saying that she had left the pension for “professional reasons”. Simmons refused to comment to PEO as to why Gallegos resigned.
Her departure, though, underscores a problem many public institutions battle – the difficulty pensions have retaining talent.
Kevin Kester (formerly of The Colorado Public Employees’ Retirement Associations), Mark Weisdorf (ex-VP at the Canadian Pension Plan Investment Board) and Rick Hayes (who had headed CalPERS’ private equity programme) are among a large population of pros that have defected from public institutions in recent years to join private money managers. Others include Frank Fernandez, who left Florida’s state pension, and Tony Johnson, who recently left the City of Philadelphia Public Employees Retirement System.
However, New York City’s desertions are happening at a much faster clip and would seem to signal an internal mess at the pension.
Adam Blumenthal, who had served as the first deputy to the comptroller, had left the pension in good hands prior to his exit in late 2004. During his time there, its assets under management grew from $65 million to $85 million, and he made the NYCRS a player in the private equity and real estate markets.
But the continuous shuffle at the top since his exit would seem to indicate that the pension has had trouble getting on without him. Gallegos’ predecessor Desmond MacIntyre lasted less than a month before he left, with reports at the time calling his departure politically motivated. Meanwhile, Gallegos’ exit came just about a year following her appointment to the role.
Another top player at the pension, Josh Wolf-Powers had joined NYCRS in 2003 as a managing director, but left soon after Blumenthal to join him at his new buyout shop Partnership Equity. And shortly after Gallegos’ resignation, reports came out publicising Wladimir Ortega’s departure last week. Ortega, who just eight months prior was named a senior investment officer at NYCRS, absconded to join Spanish fund of funds Arcano Capital, according to reports.
It’s not just the alternative investment team beating a path out the door. Greg Brooks, the former deputy comptroller for accounting at the NYCRS, and John Marlin, NYCRS’ chief economist, have also left.
Part of the struggle overseeing the pension is that the system advises five unionised clients – the Board of Education Retirement System; the New York City Employees’ Retirement System; the Teachers’ Retirement System; the Fire Department Pension Fund; and the Police Pension Fund.
A person close to the retirement system calls leading it “an impossible job”, due in part to the differing preferences of its five client pensions, as well as to the push-pull political influences from its elected comptroller overseer William Thompson and labour-union constituents.
Rita Sallis, the deputy comptroller for public finance at the pension, has taken over the CIO role on an interim basis. Simmons, the spokesperson for NYCRS, would not comment as to whether the pension is actively trying to find a permanent replacement.
As expected, Simmons was also vague as to what these departures mean for the pension. “Everything is still the same,” he told PEO in a tersely worded statement.
While permanence tends to take on a nebulous meaning in New York, even by the city’s standards, things would hardly seem to be the same. It just remains to be seen if the pension can adapt and move on.