10/12/2011

San Bernardino Taps Insider for CIO Job

San Bernardino County Employees is set to name interim chief investment officer Donald Pierce to the permanent post.

The $6.1 billion pension system, which allocates about 20% of its capital to hedge funds, has been working on reorganizing its leadership ranks since the departure last year of Timothy Barrett. He held the dual titles of chief investment officer and executive director.

In July, the San Bernardino, Calif., operation hired Norm Ruggles as chief executive — the first step in a plan to split the roles of Barrett’s old job. Last week, the pension’s board gave the nod to Pierce as chief investment officer.

Pierce, who has worked at San Bernardino County Employees since 2001, is credited with introducing the pension to several investment strategies, including emerging-market debt, non-U.S. private equity and volatility trading. “He’s been at the heart of that portfolio and its design,” said a source who was anxious to see Pierce get the position.

Barrett resigned in October 2010 to take the top investment job at Eastman Kodak — a post that pays $1.1 million a year. Pierce is now working with Ruggles to develop investment objectives, including asset allocations and return targets, and to select managers that can achieve those goals. Ruggles previously worked at Pension Trustee Advisors, a Centennial, Colo., consultant.

Before joining San Bernardino County Employees, Pierce worked at pension advisor Watson Wyatt, which last year merged with Towers Perrin to form Towers Watson.

The pension system allocates nearly a third of its assets to alternative investments. During the past 18 months, it has invested $30 million apiece in equity hedge funds managed by CastleRock Management, Clough Capital, Passport Capital, Select Equity Group and Tradewinds Global Investors. It also works with fund operators GoldenTree Asset Management, Gottex Fund Management and PineBridge Investments.

The pension recently ended its relationship with Mesirow Advanced Strategies — part of a shift in emphasis away from funds of funds and toward direct hedge fund investments.

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