Sonoma County pension fund appoints first CIO

Jim Failor, a hire that came from within the Sonoma County Employees’ Retirement System, told Private Debt Investor he had been a de facto CIO for several years.

The Sonoma County Employees’ Retirement Association (SCERA) has named Jim Failor its first chief investment officer, Private Debt Investor has learned.

The appointment – even if the change is in title only – comes shortly after the pension fund upped its opportunistic credit commitment.

Failor, who has been with SCRERA more than nine years, told PDI on Tuesday he has been “effectively doing the job of a CIO but didn’t have the title” for several years. “It’s not like I’m coming in [with] a new agenda,” he added. He reports to Julie Wyne, the fund’s administrator.

“I’m very comfortable with the [investment] programme we have,” Failor said. While he characterised SCERA as an active manager, he said the fund carries a “significant passive component” and was “careful about strategies we enter because of impact of fees”.

The new CIO said SCERA recently reviewed the makeup of its fixed-income portfolio and noticed the growing nature of the private debt. Failor said there were currently no concrete plans to seek any private debt commitments, but SCERA may consider the asset class in future investments.

The Santa Rosa, California fund upped its opportunistic credit commitment to a Davidson Kempner fund this summer, committing $25 million to SOF III-A fund in July after allocating an initial $75 million to the SOF III fund in August 2015. The strategy behind the fund is to take advantage of loans European banks are unloading from their balance sheets due to increased financial regulation.

SCERA’s $2.3 billion pension fund also includes investments in US equity, non-US equity, global equity, fixed income, real assets, global asset allocation and strategic investments. As of 30 June, the fund saw an overall return of negative 0.8 percent, 0.91 percent under its stated goal.