Deals and People December 10, 2021

Retirement Industry People Moves

Amundi U.S. appoints head of ESG; Faegre Drinker names new partner; Aon hires global analytics and actuarial leader; and more.

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Art by Subin Yang
Art by Subin Yang
Art by Subin Yang

Amundi U.S. Appoints Head of ESG

Annie Chor Joyce has been named as head of environmental, social and corporate governance (ESG) for Amundi U.S., the U.S. business of Amundi, an asset management firm. The appointment is effective as of December 6.

Joyce will be responsible for driving the ESG strategic direction for the U.S., collaborating closely with senior leadership, global ESG teams, investment management groups, and marketing and distribution teams across the firm globally, as well as with external industry partners. She reports jointly to Lisa Jones, president and CEO of Amundi U.S., and head of the Americas, and Elodie Laugel, chief responsible investment officer, based in Paris. Joyce’s appointment follows Amundi’s commitment as a signatory to the United Nations-sponsored Principles for Responsible Investment (PRI) and recent commitment to de-carbonization efforts through its participation in the Net Zero Asset Managers initiative.

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“Annie has tremendous experience across a diverse range of organizations and issues related to responsible investing, and her background provides a strong foundation for her to lead our ESG strategy in the U.S.,” Jones says. “As a firm that is deeply committed to responsible investing, we continue to invest in resources aimed at strengthening our global leadership in ESG. We are confident Annie will be instrumental in leveraging Amundi’s global ESG resources and expertise for our clients in the U.S. and across the Americas.”

Joyce has a decade and a half of experience in the financial markets and sustainability, working with institutional and wealth investors across the impact investing spectrum in both public and private markets. She joins Amundi U.S. from MSCI Inc., ESG Research, where she was vice president, ESG consultant. She led MSCI’s fixed-income ESG coverage and worked closely with institutional clients on integrating ESG and climate strategies across their enterprise, investment decisionmaking and product development activities.

Prior to MSCI, she worked at several impact-driven organizations, including Social Finance, a national impact finance and advisory nonprofit; Éclat Impact, an impact investing fintech startup; and the World Economic Forum. Prior to this, she worked at Barclays Capital in global markets.

Verus Adds to Management Committee

Verus, an investment consulting and outsourced chief investment officer (OCIO) provider, has announced the addition of Annie Taylor and Anne Westreich, both managing directors and senior consultants, to its management committee.

Taylor joined Verus in 2003 as a performance analyst. She has focused her career on serving Taft-Hartley clients. Taylor leads the firm’s Taft-Hartley sector team and serves on the firm’s OCIO committee and has been instrumental in growing the OCIO practice.

Westreich joined Verus in 2006 as a consultant serving mostly the not-for-profit sector. Her institutional investment management experience, analytical skills and deep knowledge of financial markets are instrumental in helping clients meet the difficult challenges of developing and implementing an effective investment policy. Westreich sits on the investment committee and has recently taken on the responsibility to lead Verus’ not-for-profit sector team.

In addition to Taylor and Westreich, the Verus Management Committee includes Jeffrey MacLean, CEO; Shelly Heier, president; Ian Toner, chief investment officer (CIO); Scott Whalen, executive managing director; Kraig McCoy, chief financial officer (CFO) and chief operating officer (COO); Faraz Shooshani, managing director and senior private markets consultant; and Mark Brubaker, managing director and senior consultant.

Cinctive Capital Expands Investment Team

Cinctive Capital Management, a multimanager alternative investment firm focused on long- and short- equities, has announced the expansion of its investment teams as the firm enters its third year of managing client assets.

Cinctive was launched in September 2019 in a strategic relationship with the Employees Retirement System of Texas (ERS) and PAAMCO Launchpad, a subsidiary of PAAMCO Prisma. Since then, the firm has grown with new mandates from institutional investors, opened a satellite office in Dallas and had significant hires from top-tier investment management firms. As of September 30, Cinctive has grown to 70 people from its initial launch of 35.

“From the beginning, our team has focused on building a differentiated platform that could take advantage of a white space that we saw in the industry and provide uncorrelated returns to our investors. We are particularly pleased with our success during times of market risk, including the first quarters of 2020 and 2021,” says Richard Schimel, co-chief investment officer (CIO).

Since its launch, Cinctive, whose portfolio managers focus on specific sectors, has hired individuals from leading firms in the hedge fund industry. Their momentum continued this past year with appointments from organizations including Citadel, ExodusPoint, Millennium and Sculptor (formerly Och-Ziff). Professionals that have joined Cinctive over the past year include:

Michael Tierney—portfolio manager, technology. Tierney joined Cinctive in November 2020 from Citadel’s Surveyor Capital unit. He leads Cinctive’s office in Dallas, which opened in the first quarter of 2021.  

Britt deVeer—portfolio manager, industrial. deVeer joined Cinctive in February. He previously held roles at Millennium, Soros Fund Management and Citadel’s Aptigon unit.

Jeff Eisenstein—portfolio manager, financials. Eisenstein joined Cinctive in March from Citadel’s surveyor unit. Before Citadel, he held roles at Alyeska and Morgan Stanley.

Paul Chung—portfolio manager, health care. Chung joined the firm in March, along with members of his analyst team from ExodusPoint, where he was a portfolio manager. He had previously been at Millennium.

Bryan Blum—portfolio manager, consumer. Blum joined Cinctive in June to focus on the consumer sectors including gaming, leisure and restaurants. He had previously focused on the consumer space at Millennium.

Mitch Nordon—senior analyst, risk arbitrage. Nordon joined in June to help launch and oversee Cinctive’s first risk arbitrage portfolio. He works directly with Schimel and co-CIO Larry Sapanski. Nordon previously held risk arbitrage roles at several prominent firms.

On the operations side, Taylor Bond joined the firm as chief technology officer in March. Bond previously served eight years as head of front office technology and development at Sculptor Capital Management. Bond is a graduate of the United States Naval Academy in Annapolis, Maryland, and was a nuclear-trained submarine officer.

Faegre Drinker Names New Partner

Faegre Drinker has announced that Yana Johnson has joined the firm as a partner in the corporate practice in San Francisco. Johnson comes to the firm from Jackson Lewis.

Johnson brings over 22 years of experience and will assist the firm’s public company clients in executive and employee benefits matters. Johnson has experience working in the technology, biotech, construction, health care, financial services, manufacturing, private equity, entertainment, hospitality, temporary staffing and government contracting industries.

Johnson advises public and private companies, private equity firms, venture capitalists, boards of directors, compensation committees and high-profile executives and management teams on executive compensation matters, including public disclosures, “say-on-pay,” equity plan disclosure, solicitation and engagement matters, stock exchange listing standards and corporate governance. She also has significant experience in helping clients negotiate executive employment agreements and design equity and phantom equity plans and awards, long-term incentive compensation and deferred compensation plans. Johnson is fluent in relevant corporate governance, securities and tax reporting issues related to executive compensation and benefits.

Johnson guides domestic and international buyers and sellers through executive compensation, benefits and human resources (HR) issues that arise in business transactions, including mergers, asset sales, spinoffs, financings and initial public offerings (IPOs). She regularly advises clients on issues related to broad-based compensation arrangements, including 401(k), pension, health, welfare, fringe benefit and early retirement plans. Johnson also advises venture funds, plan sponsors and financial institutions on compliance with Title I of the Employee Retirement Income Security Act (ERISA), including in credit facilities, investments and plan vendor arrangements.

Johnson earned her juris doctor from the University of California, Hastings College of the Law, where she was the articles editor for the “Hastings Law Journal” and served as a judicial extern for Thelton E. Henderson, U.S. District Court for the Northern District of California. She received her bachelor’s degree from the University of California, Santa Cruz.

Aon Hires Global Analytics and Actuarial Leader

Aon has announced that Doug Melton has joined the team as its new global analytics and actuarial leader, health solutions. In this newly created role, he is responsible for the development and execution of the health solutions department’s analytics that serve clients through data, research and analytics.

Prior to joining Aon, Melton was the analytics leader of Evernorth’s Clinical Analytics and Population Health Sciences Organization, where he worked on building out the health analytics function at Cigna. He has led many research initiatives and studies pertaining to population health, well-being and chronic condition interventions.

Melton has also worked with multiple health care organizations, creating analytical products and solutions to advance the whole health of a customer by seeking to identify and drive health risk prevention and management, while creating ease and simplicity for customers to obtain medical care.

In his new global role at Aon, Melton will be advising clients on several focus areas, including customizing solutions and analytical capabilities across regional markets; understanding differences in language, demographics and other factors; using analytics to solve common-use case issues such as supply chain management, shortage of specialties within client organizations, increased demand for behavioral health and other areas; and advising clients on how to use telemedicine to serve the health needs of a workforce.

In the wake of the COVID-19 pandemic, he is also focusing on workforce resilience, disease progression and the onset of new conditions such as mental illnesses due to the pandemic.

Data and Research December 10, 2021

Equity and Fixed-Income Investments Were No Help for DB Plan Funded Status in November

Defined benefit plan funded status is still up for the year, but there are several factors plan sponsors should consider as they set their risk tolerance for the rest of the year and into 2022.

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Brian Donohue, a partner at October Three Consulting in Chicago, says defined benefit (DB) plan funded status improved markedly in the first quarter of 2021 and, since then, plans have held on to most of this improvement. “Stocks are on track for their third consecutive double-digit return year, which has been a huge factor in pension balance sheet improvement,” he notes in October Three’s “Pension Finance Update – November 2021.”

However, the decrease in funded ratio during November nearly cancels out the prior month’s gain, according to Ned McGuire, managing director at Wilshire. The firm estimates that the aggregate funded ratio of corporate pension plans sponsored by S&P 500 companies with a duration in line with the FTSE Pension Liability Index – Short decreased by 1.1 percentage points month-over-month in November to end the month at 93.4%. The monthly change in funding resulted from a 0.9% decrease in asset values and a 0.3% increase in liability values.

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According to estimates from Northern Trust Asset Management (NTAM), the average funded ratio of DB plans sponsored by S&P 500 companies declined in November from 95.2% to 93.8%. The decline was due to negative equity returns along with higher liabilities due to lower discount rates. Global equity market returns were down approximately 2.4% during the month, and the average discount rate decreased from 2.46% to 2.42% during the month, leading to higher liabilities.

“The decline occurred toward the end of the month as financial markets pulled back at the announcement of a new COVID-19 variant, Omicron,” says Jessica Hart, head of the outsourced chief investment officer (OCIO) retirement practice at NTAM. “It is premature to definitively state whether the variant’s presence will be a lasting financial market issue. We expect key information on its global health and policy impacts to come over the next few weeks.”

And it wasn’t just equities plan sponsors had to worry about. Fixed-income investments also affected funded status. Fears that effects from the latest pandemic variant could complicate economic recovery produced sizeable dips in equity markets during the month, notes River and Mercantile in its “US Pension Briefing – November 2021.” Large-cap US stocks still turned positive results, but the same wasn’t true in mid- and small-cap stocks and international markets (developed and emerging) took a bigger hit. In addition, U.S. government fixed-income securities had positive returns due to declining yields, but that wasn’t necessarily true across investment-grade or high-yield fixed income.

The end result for pension funded status is mixed and highly dependent on a plan’s asset allocation, River and Mercantile says. Most plans with diversified equity portfolios can expect slight declines in funded status for November even though discount rates remained flat. Plans that have heavy allocations to liability-matching investments will hopefully see muted funded status changes, but a lot will depend on their mix of government versus corporate fixed-income strategies, the firm says.

“While discount rates ended the month almost where they started, the change in underlying risk-free rates (i.e., Treasury yields) and the spread between those rates and corporate bond rates paint an interesting picture,” says Michael Clark, managing director in River and Mercantile’s Denver office. “The Treasury yield curve flattened during the month with longer-term maturities coming down and credit spreads widening, a sign that the market is acting cautiously with a new COVID variant starting to spread around the globe. In the short-term, rates could inch back up—even before year-end—but a lot will depend on the effects from the new COVID variant, continued GDP [gross domestic product] growth and inflation. Over the next couple of years, the economic environment is primed for rates to push higher, but just how quickly that happens and what other disruptions could occur in the meantime is anyone’s guess at this point.”

Donohue, of October Three, says, “Treasury rates moved 0.1% lower in November, producing gains of 1% or more on government bonds, while corporate bond yields were close to unchanged, producing returns of a fraction of 1% on the month. Bonds remain about 2% down for the year, with long-duration bonds performing worst.”

Both model plans October Three tracks lost ground last month. Plan A lost almost 2% in November but remains up 10% for the year, while the more conservative Plan B lost 1% last month but is still up more than 2% through the first 11 months of 2021. Plan A is a traditional plan (duration 12 at 5.5%) with a 60/40 asset allocation, while Plan B is a largely retired plan (duration 9 at 5.5%) with a 20/80 allocation and a greater emphasis on corporate and long-duration bonds.

LGIM America estimates that pension funding ratios decreased approximately 1.6% throughout November, primarily due to poor equity performance and lower Treasury yields. Its calculations indicate the discount rate’s Treasury component declined 14 basis points (bps) while the credit component widened 12 bps, resulting in a net decrease of approximately 2 bps. Overall, liabilities for the average plan increased 0.5%, while plan assets with a traditional 60/40 asset allocation declined by approximately 1.3%.

Asset manager Insight Investment estimates that pension funded status declined from 94.6% in October to 93.4% in November. Assets declined by 1.4% and liabilities declined by 0.1%.

Sweta Vaidya, North American head of solution design at Insight Investment, suggests, “In this environment of increased equity volatility and uncertainty regarding the impact of new COVID variants, plan sponsors should revisit their risk tolerance and potential implications for funded status volatility.”

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