Who is CalPERS’ new CIO?

Nicole Musicco, an OTPP veteran, brings a track record of direct investing to the Californian pension looking to increase its exposure to the area.

The California Public Employees’ Retirement System this week named a private equity investing veteran to lead overall investments at the US’s largest public pension.

Nicole Musicco will take over as chief investment officer on 28 March, according to a Tuesday statement. She will report to chief executive Marcie Frost.

The hiring of Musicco comes after a lengthy search for a replacement for former CIO Ben Meng, who resigned abruptly in August 2020. Deputy CIO Dan Bienvenue served as interim chief investment officer following Meng’s departure.

Musicco’s appointment comes on the heels of two consecutive years of $10 billion-plus private equity deployment from the nearly $500-billion state pension. Musicco will join CalPERS at a time when the pension fund has increased its funded status from 60 percent five years ago to 80 percent today and is increasing its investments in private markets to continue “closing the gap”.

CalPERS has taken its private equity exposure to nearly 10 percent as of 31 December, from 6.3 percent in June 2020, Bienvenue said during the pension’s quarterly meeting last week.

As it works towards its 13 percent target, the state plan will continue to deploy at a high pace and aim to use its scale and influence to access “cost-advantaged” opportunities.

Here are some things to know about the woman – the second ever in the role at CalPERS – stepping in to oversee the pension’s investments, including oversight of its $49 billion private equity portfolio.

She’s no stranger to PE

Musicco has spent the bulk of her career at Ontario Teachers’ Pension Plan. She “grew up in the defined benefits industry” and has an appreciation of its broader societal good, Musicco wrote in a LinkedIn post about her appointment. After obtaining her MBA at Western University in Ontario, Canada, Musicco began at OTPP as a director focused on direct investments.

During the course of her 16-year tenure she would go on to head private equity and then public equity. She also developed the pension’s Hong Kong office. Under her watch, OTPP’s PE portfolio grew 132 percent to C$28.2 billion ($22.3 billion; €19.7 billion).

After she left OTPP, Musicco spent one year helping the Investment Management Corporation of Ontario set up its own direct investing programme as head of private markets – experience that will come in handy given CalPERS’ stated priority to build a PE co-investment programme.

She was most recently a growth equity investor

Musicco has spent the past two years leading the Toronto office of growth equity firm RedBird Capital Partners, where she was the firm’s only female partner. There she focused on developing the firm’s impact investments, as well as building investor relationships and business development activities in Canada, according to RedBird’s website.

“Having operated across strategies, asset classes and jurisdictions, Nicole is uniquely qualified to be a world-class CIO at CalPERS,” a spokesperson for RedBird told Private Equity International. Musicco’s former boss, Gerry Cardinale, and the team at RedBird are “very proud that Nicole was selected and highly supportive of her decision” to take on the new role.

During her tenure with RedBird, Musicco joined the boards of publicly traded digital sports companies Enthusiast Gaming and Playmaker.

She has spent time in Asia

Musicco is no stranger to Asia, although she has has not spent as much time in the region as her predecessor, Meng, who joined money manager Franklin Resources Inc in July 2021 as chairman of Asia Pacific.

For nearly two years from June 2015, Musicco was a regional managing director and the head of Asia-Pacific for OTPP. She was given a newly created role to build out the Hong Kong office, which opened in 2013, and develop investment operations in the region.

Musicco was developing co-investment capabilities in the region for OTPP, she told the PEI Direct Investor Summit in Hong Kong in 2016. The fund’s aim was to be “predictable, transparent, agile partners” who can leverage a global network to do “cross-border types of transactions”, she said at the time.

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