CalPERS pension investment manager Russell Read to resign

Russell Read, the person responsible for managing nearly $250 billion in pension assets for the California Public Employees' Retirement System, announced Wednesday that he will resign as of June 30.

Read's departure comes two years after he became chief investment officer at the nation's largest public pension fund, which is entrusted with assuring the retirement benefits for 1.5 million state and local government workers and their families.

"I loved working at CalPERS. It's like a second family," he said in an interview. "I am proud that we accomplished a lot."

In his resignation letter to the CalPERS board, the 44-year-old Read said he was leaving to "pursue my long-standing interests in environmental and clean technology investing." A Davis resident for the past two years, Read owns a tree farm in the rural community of Brooks, Maine.

On Wednesday, George Diehr, CalPERS' investment committee chairman, noted that Read "has great enthusiasm for environmental and clean technology investments, and we look forward to hearing about his future endeavors in sustainable investments as that sector grows in the capital markets."

Before Read joined CalPERS on June 1, 2006, a University of Maine colleague described him as down-to-earth and committed to environmental issues. "He showed up on the scene (in Maine) with some very interesting ideas about natural resources investing," said Bob Strong, a finance professor at the University of Maine. "He loves the land. He talks a lot about his trees."

CalPERS said Read's position will be filled on an interim basis by Anne Stausboll, currently the chief investment operating officer of CalPERS. No time line was given for permanently replacing Read, whose annual salary is listed at $555,360.

CalPERS saw significant investment returns in Read's first 12 months on the job. Assets grew by 19.1 percent for the fiscal year ended June 30, 2007.

Fund officials said growth for the current fiscal year is expected to be relatively flat, similar to the performance of the Standard & Poor's 500 Index over the past 12 months.

During his tenure, Read mapped out a new investment paradigm for the giant fund that integrated the highly volatile world of commodities and natural resources. CalPERS reduced its overall stock and bond holdings, shifting money to infrastructure projects such as wastewater treatment plants, commodities, forest land and bonds linked with inflation.

In addition, the investment staff began giving equal weight to domestic and foreign stock holdings – eliminating a home-country bias that has long dictated the investment philosophy at U.S. pension funds.

Read said that he wanted to take time to map out his future. He did say that he "anticipated working in California for years to come."

"My plans won't firm up until some time over the summer," Read wrote in his letter.

CalPERS and the California State Teachers' Retirement System have earmarked nearly $1 billion for green investments. In addition, the two massive pension funds have been active in advocating clean technology practices.

Read said his passion for environmental/clean technology investing has grown. "I'm in a unique position to play a leading role to help galvanize scientists, technologists and investors with environmental investing," he said.

Read's interest in the environment dates back years. He served as the socioeconomic adviser for the Forest BioProducts Research Project at the University of Maine and chairman of the finance committee for Maine's Fractionation Development Center, which is dedicated to the transformation of wood into energy and materials currently provided by crude oil.

The chief investment officer manages diverse assets, including international equity, U.S. Treasury debt, high-yield bonds, mortgage-backed securities, real estate, corporate governance, venture capital, leveraged buyouts and hedge funds.

There could be a fresh challenge, though. The CalPERS staff is examining the impact of a legislative proposal that would allow private sector businesses and workers to open up retirement plans that would be managed by the pension plan.

Gov. Arnold Schwarzenegger is backing the proposal, spelled out in Assembly Bill 2940 by Assemblyman Kevin de León, D-Los Angeles. The CalPERS board is awaiting a report from its staff before taking a position.

Read joined CalPERS after serving as deputy chief investment officer for Deutsche Asset Management and Scudder Investments.

About the writer:

• Call The Bee's Mark Glover, (916) 321-1184