Executive Director and Chief Investment Officer

Company
Florida State Board of Administration

Location
Tallahassee, Florida

Category
Executive officer
Administrative officer

Field of Interest
Other

Florida State Board of Administration (System or SBA), the nation’s 4th largest public pension fund, ranked as one of the best funded public plans nationally, located in Tallahassee, is searching for an Executive Director and Chief Investment Officer (Executive Director) to lead this agency managing over $162 billion in assets as of January 31, 2008.

The SBA is an agency of Florida state government that provides a variety of investment services to various governmental entities. These include managing the assets of the Florida Retirement System (FRS) Pension Plan (defined benefit), and Investment Plan (defined contribution plan), the Lawton Chiles Endowment Fund (LCEF), the Local Government Investment Pool (LGIP), the Hurricane Catastrophe Fund (CAT Fund), the Lottery Fund and a variety of smaller funds.

For fiscal year 2007, the SBA exceeded the total fund investment benchmark for all reported time periods (1, 3, 5 and 10 years), and ranked in the top quartile among its peers over one and three years. The net asset value of total funds, including 35 mandates and trusts, under management grew to $183 billion from $151.1 billion over the prior fiscal year. In February 2007, the Standard & Poors Rating Service ranked the FRS Pension Plan as the leading state pension fund in the nation, having the highest funded ratio of any U.S. public pension fund, 107.3%.

A Board of Trustees governs the SBA. Comprised of Charlie Crist, Governor, Alex Sink, Chief Financial Officer, and Bill McCollum, Attorney General, the Trustees have ultimate authority and oversight for the SBA. The Trustees delegate authority to the Executive Director, who serves at the discretion of the Trustees and is responsible for managing and directing all administrative, personnel, budgeting, investment policy and investment functions. The Board employs ~180 people and has an annual operating budget of $24.5 million. While SBA is a state created organization, it is exempt, by statute, to most state purchasing procedures, employment processes and compensation policies.

An Investment Advisory Council, appointed by the Trustees, also advises the System and Trustees, providing independent oversight of SBA’s funds and investment responsibilities. The Council meets quarterly to review SBA’s performance, risk policies, asset allocation, general investment policies and broad topics related to the general economic outlook.

The largest fund managed by the SBA is the FRS Pension Plan, a defined benefit plan, representing approximately 75% ($136.3 billion) of the total value of assets under management. The plan does not require employee contributions, and employer contribution rates are adjusted annually according to investment performance and actuarial experience. FRS Investment Plan, a voluntary alternative to the FRS Pension Plan, is modeled after 401(k) plans and provides public employees with portable retirement benefits. Since July 2002, the FRS Investment Plan has become one of the largest optional public sector defined contribution retirement plans in the U.S., with over 98,000 members and $3.7 billion in assets. The FRS Investment Plan is an employer-only funded plan. The SBA manages 33 other investment portfolios with combined assets of $44 billion during fiscal 2007, including:

The CAT Fund was created in 1993 and is a vital source of emergency funding for residential property insurers that helps keep hurricane insurance available to Florida homeowners.
The LCEF invests portions of Florida's tobacco settlement monies to provide a perpetual source of enhanced funding for health maintenance and research programs related to tobacco use.
Florida debt service accounts for state bonds.
Other smaller but important portfolios, such as the Florida Lottery Fund, Police and Firefighters’ Fund, and Florida Prepaid College Plan, to name just a few.

Another mandate, the LGIP, until recently the largest local government investment pool (non-pension assets) in the country, serving over 1,000 clients with a market value of $30.9 billion at fiscal year-end 2007, experienced tumultuous times during late November 2007 due to four issuers being downgraded by S&P resulting in these issuers falling below purchase guidelines. Participants withdrew 27% of total assets reducing the pool to approximately $12 billion. In order to protect remaining investors, the pool was temporarily closed from November 29^th to December 5^thand BlackRock was hired as a financial advisor to provide recommendations. A plan has been implemented to stabilize the pool, evaluate and improve controls and restore customer confidence. SBA, as a holder of over 12,000 different securities, takes an active role in strengthening corporate governance supporting the adoption of internationally recognized governance practices for well-managed public companies. During fiscal year 2007, the SBA executed votes on 3,563 public company proxies covering over 27,160 individual voting items.

For more information, please visit www.sbafla.com. The most recent annual Investment Report is available at www.sbafla.com/pdf/investment/annual/2007/AIR.pdf.

This is an exciting opportunity to be the chief executive of the 4^th largest public pension fund in the country. As Executive Director, you will have overall responsibility for the $184 billion in assets managed by SBA. The authority to hire/fire managers resides with the Executive Director; however, it is expected that the Investment Advisory Council and Trustees will be kept appropriately informed.

The SBA employs ~ 180 people, there are eight direct reports: Deputy Executive Director/Deputy CIO; Senior Investment Policy Officer and Economist; Senior Investment Officer, Defined Contribution Program; Senior Operating Officer, Florida Hurricane Catastrophe Fund; Chief Operating Officer; General Counsel; Inspector General; and Senior Corporate Governance Officer. The Executive Director has the broad investment and organizational responsibilities that generally accompanies the chief executive at a large investment management organization. S/he will provide high-level leadership on important responsibilities such as:

Review and, if necessary, implement a new organizational model to ensure SBA’s resources are aligned to continue the System’s strong investment performance to ensure the long-term financial stability of the various plans.

Review the System’s governance structure and, if necessary, implement changes to ensure enterprise and portfolio risk are appropriately managed and decision-making is efficient to realize investment opportunities.

Review and advise the Investment Advisory Council and Trustees on appropriate changes/updates to the investment policy to ensure that assets are well diversified to optimize returns, while controlling risk.

Recruit, hire and retain qualified investment professionals to ensure appropriate resources are available today, and in the future, to manage the investment responsibilities of SBA.

Review the role of the System’s external investment consultants to ensure these resources are appropriately used to support the investment responsibilities of SBA.

Evaluate and, if necessary, modify the manager search process to ensure appropriate use of external investment consultants and internal resources resulting in utilization of best practices in manager evaluation and selection.

Review the current investments/managers to ensure compliance with the System’s investment policy and asset allocation; closely evaluating risk and advise the Investment Advisory Council and Trustees of any necessary changes to protect the System’s assets.

In addition to providing high-level leadership on the above responsibilities, the Executive Director should:

§ Provide education and be a thought leader on investment matters, including non-traditional assets, to the investment staff, Investment Advisory Council and Trustees.

§ Establish relationships with key external stakeholders (e.g., legislature, employer groups, retiree groups) to inform and educate these stakeholders on the SBA business to build long-term productive relationships.

Establish relationships within the global investment community (e.g., investment, managers, investment consultants) to ensure SBA has access to best-in-class research and managers.

The SBA is searching for a chief executive with exceptional leadership skills, an understanding of financial markets, securities and pension finance, and broad-based investment experience with a track record of leading complex organizations. The minimum qualifications and preferences include:

Bachelor’s degree (Master’s preferred) from an accredited college or university in accounting, economics, finance, economics, or a closely related field.
CFA preferred.
10 years of progressive responsibility in investment management and administration, including three years in a senior management or executive leadership position.
Experience building a performance driven investment organization and a demonstrated track record of hiring, training and retaining investment professionals.
Generalist investment knowledge and experience across all asset classes.
Experience leading externally managed investment organizations preferred.
Demonstrated track record of leading investment organizations that add value as compared to appropriate benchmarks.

Experience leading a large complex public pension fund is preferred; however, applicants from other investment organizations with relevant experience will also be considered.

This is a highly visible position within the state and the global investment community with exposure to many constituencies. The Executive Director, as the chief executive, must be confident and have the poise and presence to interact and influence Trustees, legislators, employer groups, retiree groups, media and other key stakeholders; s/he must have the public persona that instills confidence and integrity and be non-partisan. The Executive Director must believe and adhere to the highest ethical, fiduciary, and professional standards.

The Executive Director must take ownership of the investment responsibility and be the organizational leader with the confidence and courage to lead and advocate for the System’s mission. S/he must be intellectually sharp, a strategic thinker, a visionary, and one who will:

§ Communicate in a direct, transparent, honest and forthright manner.§ Advance issues and outcomes (be action-oriented) by influencing others.§ Bring new ideas and best practices to advance investment performance and organizational development.§ Articulate complex investment matters in terms appropriate to various audiences.

The Executive Director must be adaptable, approachable, willing to listen, and welcome open and challenging debate. S/he must have energy and passion, and an “appetite to be great” so as to continue to enhance the excellent reputation of SBA with active and retiree members and the state and global investment community.

The SBA, being one of the largest public plans in the country, by the nature of its size, periodically comes under public scrutiny by the media, legislature, and others. As such, the Executive Director must be effective working in and managing these external relationships in such an environment.

Compensation will be commensurate with experience and qualifications, includes a base salary and bonus, and is designed to attract the best-qualified professionals from the national market. Comprehensive health care, retirement benefits, and relocation assistance are also provided. Florida does not have a state income tax.

For additional information or to submit a resume, please email:

Jackie Tisch, Senior Consultant

Hudepohl & Associates, Inc.

150 W. Wilson Bridge Road, Suite 203

Worthington, OH 43085

614-854-7300

jtisch@hudepohl.com

Date Posted
March 13, 2008

Executive Director and Chief Investment Officer

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