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Key Departure at CalPERS

Mike McCook charted a new course in real estate investment for the state retirement system. Will his successor continue his strategy?

When Mike McCook became senior investment officer at CalPERS in March 2001, he managed a real estate portfolio of about 40 investment programs. At the time of his departure in late August, the state pension fund had a portfolio of more than 100 programs. In fiscal 2005, the real estate portfolio generated a return of 39 percent.

“Our performance obviously has exceeded every benchmark that we had,” McCook told PERE. “When you do that and there aren't a lot of complaints, from either partners or union sources, then you must be doing your job right.”

McCook was a key player in the management team of CalPERS' chief investment officer Mark Anson, who left the pension fund in January for investment manager Hermes in London. Anson is credited with directing the record-setting financial growth at the nation's largest public pension fund, driving assets from $156 billion in 2001 to $207 billion today. The real estate portfolio played no small part in that growth, recording a 16.3 percent gain for the five years ending September 30, 2005.

years ending September 30, 2005. Despite his success, CalPERS did not select McCook to replace Anson as CIO, selecting instead Russell Read of Deutsche Asset Management.

“I've been here five years, the opportunity to advance my career here is limited, so it's really time for me to go,” McCook said. “It's been a great run.”

McCook said he is looking at different opportunities, but will most likely work “within a fund in one way, shape or form” in the Bay Area.

Before joining CalPERS McCook, 57, oversaw real estate deals for Institutional Housing Partners out of Irvine, a housing partner for CalPERS. He has been working in the industry for 28 years, having started in real estate lending with Home Federal Savings & Loan in San Diego in 1978.

Of all his accomplishments at CalPERS, McCook said one of his proudest has been transforming CalPERS into a global real estate investor in just five years. The pension fund is now invested in over 23 countries including China, India, Brazil and Eastern Europe. He says he appreciates that CalPERS gave him the freedom to implement his strategy.

“A lot of people look at CalPERS and they see the corporate governance, and they say, ‘Boy that's a tough shot,’” he said. “But CalPERS has allowed me more flexibility to grow this program than any person of a comparable position would have anywhere in the world. The board has been extremely supportive of what we've done in real estate.”

Westport hires Martin Landau
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UBS exec leaves to launch firm
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