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Oregon CIO to leave for Virginia

The intense shuffling of US public pension investment officials has continued with Ron Schmitz, the long-time CIO of the Oregon State Treasury, leaving for the Virginia Retirement System.

Ron Schmitz, chief investment officer for Oregon’s state treasury, is leaving after about nine years on the job to take on the same role at the Virginia Retirement System.

Schmitz took over the investment portfolio at Oregon in 2002 after having worked as CIO for the Illinois State Board of Investment. Schmitz will replace Virginia CIO Charles Grant, whose contract expired in August. He is expected to start at the $51 billion pension on 31 October.

No decisions have been made on a replacement for Schmitz, according to a spokesperson for the Oregon treasury.

The spokesperson declined to comment about why Schmitz was leaving. However, one person with knowledge of the situation said Schmitz is leaving because of compensation differences between the two systems.

While Schmitz did not specifically focus on private equity at Oregon (a role headed by Jay Fewel), he did run the investment portfolio at a time when the pension put out a list of guiding principles that were meant to govern the relationship between general partners and limited partners. The system put out its principles in 2009, ahead of a list of principles published by industry trade association the Institutional Limited Partners Association.

Oregon’s list, similar to the later ILPA guidelines, called for lower fees, holding back carry until investors are paid back 100 percent and the GP’s contribution should reflect “a substantial amount of the net worth” of the principals making up the general partner – and a high percentage should be contributed in cash.

Schmitz leaves Oregon under something of a dark cloud. In July, the Oregon Government Ethics Commission reprimanded – but did not charge – three state Treasury officials, including Schmitz, for violating state ethics law involving travel expenses and reimbursements from firms doing business with the system, according to The Oregonian and other media outlets. Names of the investment firms involved were not provided as of press time.

Schmitz is the latest in a host of public pension investment officials to leave their posts this year, including Wayne Smith, the former head of private equity at the Massachusetts Pension Reserves Investment Management Board, who left to join Pathway Capital Management.