One year ago on Election Day, Robert Borden and the South Carolina Investment Commission won everything they could have asked for: complete investment freedom.
Mr. Borden and the commission staff overseeing the state’s $30 billion in public retirement assets are now using that freedom to push the state into roughly a dozen new asset classes — and moving more than $20 billion into a combination of portable alpha, derivative overlay and absolute-return strategies, among others.
Mr. Borden, who was tapped as the state retirement system’s first CIO in March 2006, inherited a portfolio whose investments were hardly sophisticated, let alone diversified. Up until 12 months ago, the assets were split evenly between U.S. equities and fixed income.
Mr. Borden relied on his extensive experience identifying hedge fund managers, which dates back to his post as CIO of the Louisiana State Employees’ Retirement System, Baton Rouge, a position he held for more than 10 years before joining the South Carolina fund.
“He started leading us into the hedge fund space in the late 1990s, well before a lot of our public fund peers,” said Robert Beale, current CIO of the $8 billion Louisiana system who handled the hedge fund and private equity investments during Mr. Borden’s tenure. He added that under Mr. Borden, the system’s performance improved significantly and noted that Louisianan’s 12.6% annualized returns for the five-year period ended June 30 ranks in the top 11% of Wilshire Associates Inc.’s Trust Universe Comparison Service database for all public pension plans.
Mr. Borden intends to invest more in private equity and also plans to kick off the state’s investment in real estate in the near future. But he said both are longer-term investment plans that will take several years to implement.
Tuesday, November 13, 2007
Former LASERS Executive Director Leading South Carolina to new Investment Directions
The South Carolina Investment Commission is moving the state’s retirement assets toward a more progressive asset allocation policy after decades of mostly conservative investments.