CalPERS CIO Anson departs to Hermes

Mark Anson’s move from the California Public Employees’ Retirement System (CalPERS) to private investment manager Hermes is a jump many public pension plan heads have made before.

After four years at the helm of the $196 billion California Public Employees’ Retirement System (CalPERS), Mark Anson has moved on to the private ranks to take over as the CEO for London-based institutional fund manager Hermes Pensions Management Limited. He is succeeding Tony Watson as CEO, who will retire at the end of January 2006.

The move from public institution to private investment manager is a path that has been worn out in recent years. Kevin Kester left Colorado’s Public Employees’ pension plan to join The Broe Cos.; Mark Weisdorf left the Canadian Pension Plan Investment Board to launch his own Toronto-based investment boutique; Frank Fernandez defected from Florida’s state pension to join Alignment Capital; and most recently Tony Johnson absconded to Franklin Park from Philadelphia’s pension.

CalPERS, meanwhile, has seen this happen before. Last June, Rick Hayes, a senior executive at the pension, transitioned to Oak Hill Capital Management, and the person that Anson replaced at CalPERS, Barry Gonder, left to join Grove Street Advisors in 2001.

During Anson’s spell as the head of CalPERS, the fund grew from $127 billion to $196 billion (€162 billion). He also helped to oversee the adoption of a new strategic model for the pension plan and undertook the establishment of its governance agenda.

“Mark did a spectacular job for us during some of the most difficult periods in our financial markets,” Rob Feckner, president at CalPERS, said in a statement.

Mark Anson, CEO, Hermes Pension Management Ltd.

While nobody has directly attributed Anson’s departure to compensation, many public pensions and even endowments have been handcuffed by unspoken limits on what they can pay their investment heads.

One notable example of this occurred at the not-for-profit endowment of Harvard University. The endowment’s outgoing CIO Jack Meyer roiled many when the $30 million-plus salaries of two of his fund managers were made public in 2003. Meyer, meanwhile, had reportedly achieved average annual returns of almost 16 percent during his 15 years at Harvard, and helped build endowment to $25.9 billion, more than $10 billion above its nearest university competitor.

Brad Pacheco, a spokesman for CalPERS, conceded that compensation can be an tricky area for public pensions. “Compensation in the investment industry has been an issue for the public pensions. It always has been. [Public pensions] can’t pay as well as firms on Wall Street, so in that sense it’s been a disadvantage.”

Pacheco did add, however, that CalPERS has benchmarked competitive salaries among other public pension plans, and has moved to keep its salaries near the top.

Anson joined CalPERS in October 1999 as a senior principal investment officer, and nine months after that was given the role of senior investment officer for equities. He was named the CIO in December of 2001.

CalPERS will meet in November at the plan’s previously scheduled board meetings to discuss steps to replace Anson. When asked if CalPERS would look in-house for a replacement, Pacheco noted that the pension has historically hired a head-hunter, although the board would determine that in November.

Separately, in an unrelated story, the pension plan received some good news today, when it was awarded more than $200 million from a non-class action lawsuit filed against former WorldCom executives. CalPERS was joined in the lawsuit by  fellow California pensions CalSTRS and LACERA, which will each see a recovery of $38.7 million and $18.7 million, respectively.