The idea man

Meet Russell Read, the recently appointed chief investment officer of CalPERS. An economist by training, he likes physics, donuts from New Orleans and planting trees on his property in Maine. By Paul Fruchbom.

Filling the shoes of Mark Anson, the highly regarded chief investment officer of the California Public Employees’ Retirement System, is no easy task. Fortunately for Russell Read, filling shoes is something he does with relative frequency.

According to a 1999 profile in the New York Times, Read, then the director of investment-product design and risk management at Oppenheimer Funds, kept an extra pair of shoes under his desk. Apparently, he walked around so much that he frequently wore out his soles, necessitating a backup pair at the office.

Two weeks ago, Read, now 42 years old, was named the new CIO of CalPERS, the largest public pension fund in the US with $208 billion (€164 million) in assets. Not only will Read now oversee one of the most influential institutional investors in the world, presumably, he will also be more forgiving on his loafers—people don’t walk in California.

Read: moving to California

Read, who will join CalPERS in June, is currently the deputy chief investment officer for Deutsche Asset Management in New York, where he has responsibility for more than $250 billion in equity, fixed income and commodity-based investment products for retail and institutional investors. Though his experience with alternative assets such as private equity and real estate may be limited, he has a significant background in research, quantitative investing and other areas of finance. His prior work experience includes stints as the global head of quantitative investing and research at Zurich Scudder, as well as senior positions at Prudential, First Chicago and Oppenheimer, which has turned out to be a breeding ground of sorts for future CalPERS’ investment officers—Anson was a portfolio manager at the firm before joining the pension fund in 1999.

Read’s diversity of experience was an important factor in his selection as CIO particularly given the pension fund’s broad asset mix. Some reports had speculated that the position would go to an internal member of CalPERS’ investment team. Leading contenders included Christy Wood, the pension fund’s head of equity investments; Curtis Ishii, head of fixed income; and Mike McCook, who ran CalPERS’ real estate program. McCook resigned from the pension fund last month.

“[Read’s] wide breadth of experience with all asset classes was a real breadwinner for him,” Rob Feckner, the president of CalPERS, told the Sacramento Bee.

Read, who received an MBA from the University of Chicago, also holds a PhD in

I like to be surrounded by ideas.

Russell Read

political economy, a master’s in economics and a master’s in political science, all from Stanford University. Yet his diverse background extends beyond the realm of finance and education. He is actively involved in environmental issues, an area that has also been targeted by the CalPERS board. Read is the socioeconomic advisor for the Forest BioProducts Research Project at the University of Maine and head of the finance committee of the Fractionation Development Center, a non-profit organization dedicated to developing biomass-conversion technologies. Read’s involvement with the environment even extends to his own property. He planted 10,000 trees—including oaks, sugar maples, black cherry elms and chestnuts—on his farm in the secluded town of Brooks, Maine according to a presentation he made to the Maine chapter of the American Chestnut Foundation several years ago.

In the Times article seven years ago, it was clear that Read’s interests extended even further. The other items on (and under) his desk included: a black notebook containing mathematical formulas on investment strategy; two books by the physicist Richard P. Feynam—“I like to explore alternative physical structures,” he said; beignet mix from his favorite café in New Orleans; and a statue of Buddha, a reflection of his interest in India.

“I like to be surrounded by ideas,” Read said at the time.

No doubt he’ll be surrounded by plenty of ideas in his new position. Who knows? He might even plant some of his own.