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Capital Allocators – Inside the Institutional Investment Industry

Mar 19, 2018

Wayne Wicker is the Senior VP and CIO of ICMA Retirement Corporation, an asset manager that oversees $50B across more than a million retirement accounts of City and County public sector employees throughout the country. Before joining ICMA-RC in 2004, Wayne had a distinguished career as an allocator and manager, starting as an allocator at the corporate pension fund of Dayton Hudson (now Target Corporation) in the 1980s and the Howard Hughes Medical Institute endowment in the mid-1990s, after which he moved to direct investing in large cap growth equities for seven years at Cadence Capital Management in 1998.

Our conversation covers Wayne’s career path, multi-asset investing, and the ins and outs of managing defined contribution plans as a fiduciary and as a business. We discuss asset allocation strategies, regulatory limitations, stable value products, retirement shortfall risks, active vs. passive on large pools of capital, and managing internal and external teams.

This episode took place at a recent Institutional Investor conference for Corporate Funds and Insurance Portfolios, with the core discussion about ICMA-RC occurring in front of a live audience.


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Show Notes

2:01 – How Wayne first got into the investment business

3:58 – What he did after getting his MBA

7:25 – How he learned about the pension business as a staff of one

9:18 – Key investment lessons from his early career

11:08 – Decision to move on from Target/Dayton Hudson

12:44 – Key differences between overseeing a corporate pension vs a hospital endowment structure

14:25 – How much did the difference in the investing strategy come from the mission of the funds vs the boards overseeing them

15:50 – What could Wayne do on the margin at Howard Hughes

17:28 – Transition to CIO

22:40 – Live Show Begins

23:00 – Defining ICMA-RC

23:32 – How does Wayne think about setting investment objectives with such a diverse group of clients

25:02 – Is it frustrating to have a more finite universe of investing options compared to previous work at Howard Hughes and Dayton Hudson

26:08 – Views on active vs passive

27:50 – The manager selection process

28:49 – Managing risks with external managers vs an internal team

30:34 – How does the team at ICMA-RC put their best ideas forward without governance getting in the way

31:34 – What constraints are imposed on investment decisions by the various regulatory bodies that ICMA-RC faces

32:40 – Their outlook on the market

34:08 – How does ICMA-RC’s constituents respond to market performance

            35:32 – Closer examination using 2008 stock performance

36:23 – How does Wayne educate investors

38:00 – Next steps for ICMA-RC

38:51 – Most challenging aspect of Wayne’s work life

39:41 – Is there a looming pension crisis

40:53 – How do the Financial Planners help the employees if things don’t work out

42:10 – How do they think about financial planning for clients when there’s a chance defined benefit plans could come up short in the future 

45:06 – How does Wayne address manager selection differently today given some of the constraints that he faces

47:19 – What has led Wayne to want to exit manager relationships

49:46 – Is there a point where Wayne would decide the optimal strategy is to go passive

51:28 – How does Wayne think about technology and the way it will be disrupt the industry

52:58 – Balancing the internal/external dynamic when hiring people

54:30 – Wayne’s greatest success and failure over the last 14 years

55:50 – Where will the move into emerging markets come from 

56:27 – What does Wayne think of the new products that can help younger constituents meet their retirement objectives

57:41 – Live Show Ends/Closing questions