How To Get Hired at a Pension


Hello and welcome to Free Money, a podcast/newsletter from Sloane Ortel and Ashby Monk about how long-term investors can free themselves from the shackles of short-term thinking.

If you’re new here, thanks for signing up!

If someone sent this your way or you found this post through Twitter or some other channel, be sure to sign up below. We publish most Tuesdays.

And now, a look at how to get hired on the investment staff of pensions, foundations, and endowments.

white rabbit figurine beside macbook pro

Looking for work is no fun at all.

This is Sloane, and I know because I’m doing it. My consulting business has slowed down dramatically since COVID hit, which means I’ve gone from outright thriving to just surviving.

Please do reach out if you’d like to chat about a project. But it’s not just my story. Everyone seems to have lost something during the pandemic. And the notion that tech companies are thriving under these conditions doesn’t make much in the way of sense.

For instance, the startups Ashby is involved with building have variously had to pivot, shift priorities, and postpone investments. There’s just less money out there to buy data, and now that it’s near impossible to make sales in person that problem is compounded.

None of that shows up in headline unemployment statistics in the United States. These necessarily simplified numbers do not purport to measure underemployment or changes in business’ investment plans, but they do tend to define our perspective of the labor market.

So after a listener wrote in wondering how to get a job at a pension fund, we felt it was important to respond with a big picture perspective. That’s why we called Charles Skorina, a longtime recruiter of investment professionals and observer of hiring trends at endowments, foundations, and public pensions.

After talking about a paper Ashby wrote that examined this from the pension’s perspective, we asked the obvious question: how does one go about getting hired at one of these organizations? And we got an empirical answer, rooted in Charles’ study of the various CIO resumes he’s come across in the course of doing his business. We also looked at how career stage, job history, and the power of example can influence this search process.

You can check out the transcript here or click above to listen in your favorite podcast app.

We also touched on the lovely goods available at the Free Money Atelier. And as usual, we answered questions from listeners:

  1. You two talk about the rise of ESG investing like it's a good thing. And I'm sure that's overwhelmingly true. But are there any dystopian consequences of esg's growing popularity? This is 2020, after all. 

  2. The "active ownership" theme is really interesting - how long has it been going on? What's the first action by a long-term investor you're aware of that you would classify as "active ownership"

  3. The giant "nasdaq whale" that has been hoovering up equity options with a highly unusual appetite was revealed to be... Softbank. Doesn't this prove that asset managers should be more closely regulated? 

If you’d like us to answer a question from you on an upcoming show, write to

Thank you for reading & listening!

Nothing contained in this website or podcast should be construed as investment advice.

Free Money S02E11 Transcript

Featuring Charles Skorina

Hello and welcome to Free Money, a podcast/newsletter from Sloane Ortel and Ashby Monk about how long-term investors can free themselves from the shackles of short-term thinking.

If you’re new here, thanks for signing up!

If someone sent this your way or you found this post through Twitter or some other channel, be sure to sign up below. We publish most Tuesdays.

And now, a transcript of this episode. Just a quick reminder first: none of this is investment advice. Also, this transcript has been edited for clarity and may differ somewhat from the recording. Enjoy!

Sloane Ortel (00:00:10):

Welcome to the free money podcast. It's where we give you the Brooklyn-Bay Area consensus about institutional investing that you desperate, desperately crave.

Ashby Monk (00:00:19):

We call it the free money munchies,

Sloane Ortel (00:00:21):

The free money munchies. Yeah, exactly.

Ashby Monk (00:00:25):

You're craving a little free money insight. Nom nom nom nom. Sorry. It's Friday.

Sloane Ortel (00:00:34):

I mean, yeah, exactly. Like that must be just like a classic mood shift. Like people are encountering Friday us on a Tuesday when this is eventually released.

Ashby Monk (00:00:42):

What a trip for these people, people that are just so ready to be done with everything, but their week just started yeah.

Sloane Ortel (00:00:56):

But yeah, like, I mean, this is kind of a crazy episode. I mean, this is the job's episode. Right. And I think what's interesting about that. Like, you know, right now we just got some new jobs numbers. Right. and the unemployment rate, like the headline unemployment rate is down to 8.4%, which is not good. It was like 3% before the global pandemic.

Ashby Monk (00:01:18):

It's not a strong number. Yeah. Yeah.

Sloane Ortel (00:01:20):

There are definitely better numbers out there. And like, what's funny about that number is like, it doesn't, it's not the whole story, right?

Ashby Monk (00:01:34):

Oh, definitely. I mean, the funny thing in this process, you know, we've had this mirage that I feel like has been built with the stock market, you know, and this notion that like tech companies are killing it, it's a frickin' and Mirage. And this week, some of that mirage seems to be you know, being revealed as such, we've seen the market's kind of coming off, but for the most part, like you would never know in like reading the press about tech companies or, you know, like people are suffering. Yeah. We are. And we were talking about this before the show, like we're suffering.

Sloane Ortel (00:02:16):

I mean like, yeah. My consulting business is down substantially. I mean, like I've got really interesting stuff going on on a couple of projects, but I'm at like 25% of my capacity. You know, and that freaking sucks.

Ashby Monk (00:02:29):

And by the way, that means you're not part of the data. Yeah, exactly. You're not one of the stats, even though you're massively underemployed.

Sloane Ortel (00:02:37):

Exactly. Exactly. And that's like, you know, and that's like frustrating in a number of ways. Right. Because it's like, you know, it makes it, you know, you have to pursue both consulting assignments and like full time work simultaneously, you know, it kinda makes you feel like the, you know, businesses get built jobs get gotten in this process that like, you know, basically it's, you know, everyone has their advice and then eventually you get lucky and the process ends.

Ashby Monk (00:03:03):

Yeah. Yeah. It's fascinating. I feel like I always tell people that if they want a job, they need to like keep being their job, you know? Cause it's being on the job train, like you're just moving from cars. But once you get off the job train, it's pretty hard. Yeah. And I raise this like as, as my family, not my wife will be like, what the hell are you doing? Talking about our shit. But she just, she just quit her job this week.

Sloane Ortel (00:03:29):


Ashby Monk (00:03:29):

Yeah. It's a big life change for my entire professional and adult life. Like my wife and I have been two working parents, but she's been like at the same place for five years. And she was always thinking about a break, but I have to tell you like the insanity of running the zoom schools and the like nonstop attention that our children need not fricking easy convinced her to bite the bullet and, and like quit her job early so that like she could help the kids. And like, I have to tell you, like, as a family, that's kind of devastating because we've always been like, we're not a patriarchal family. Like, you know, like we want to be this like modern family. That's awesome. And like, you know, everybody's working and here we are, you know, Courtney's at home taking care of the kids. It's weird. It's like, we're not in the data either. But like, yeah.

Sloane Ortel (00:04:29):

I mean, unemployment famously, like, I mean basically the way that, that, that works is there's an estimation of what constitutes the labor force. Right? And like the, you know, there's basically the BLS kind of looks at it as this binary where you either are in or not in the labor force. And if you sort of have, you know, quit your job to provide childcare, that's not counted in the statistics. If you've kind of like, if you're underemployed, that's not counted in the statistics.

Sloane Ortel (00:04:55):

And so there's this illusion of widespread prosperity, which in a way creates this fundamentally American situation. Like I think John Steinbeck had this great quote that all Americans are temporarily embarrassed millionaires. Right? Where at some point our ships are all gonna come in, you know, and everything is going to be fine, but there's this illusion of prosperity. That's, that's so prevalent in our society.

Ashby Monk (00:05:19):

I mean, isn't that the American dream that like, we all have a shot at being millionaires. It just so happens. It's the only shot most of us have is a lotto ticket at the liquor store.

Sloane Ortel (00:05:30):

Hey, options have value Ashby.

Ashby Monk (00:05:34):

The other Mirage though, I have to say is like, everybody's like, Oh, tech companies are just killing it right now. And like, as somebody who has like been building tech companies and working with tech companies, like in no shape way, shape or form, would I say that like the companies that I've been building or working with are like way better off because of covid. Some have pivoted to like handle COVID, but like, I don't buy this this like widespread belief that like tech companies have just are going to just kill it because everything has been made virtual. I think we're all kind of hanging on to this, this moment where like, yeah, like maybe they are well positioned, but like how this plays out over the next two, three, four years. I still think we have a lot of pain that's coming. And I say that from the experience of having to like pivot these companies out of industries and the inability to get on airplanes, to sell SAAS consulting deals or the budgets drying up to buy data, or, you know, it's like really? It's just hard for me to believe that tech is, has this amazing moment happening with what I'm seeing on the ground.

Sloane Ortel (00:06:51):

Yeah. I think that there's like a tendency to be like, Oh, that's bad news, but actually paradoxically it's good news. Like I saw a tweet the other day that said "Freakonomics is singlehandedly responsible for like every like 40 to 55 year old person being like, ah, I see this data, but actually it's wrong.

Ashby Monk (00:07:09):

You're going to make me laugh so hard. I know exactly what you mean. "Oh, you're not interpreting it correctly." This interpretation. It's like Jesus Christ. I do like freakonomics though, just to be clear, but it is funny how everybody is a data analyst.

Sloane Ortel (00:07:30):

Yeah, exactly. It's like, ah, you'd think that, but you would be wrong, but like, you know, I think like this, we can make this like complicated at a high level, but you know, we've had listeners write in, you know, and obviously there's some open questions about like, how do you actually get a job at a pension fund? Let's get some answers for that? Right. Yeah.

Ashby Monk (00:07:50):

First off. I mean, I did a whole paper, academic paper I think the name of the paper was called attracting talent to the frontiers of finance. And originally I wrote the papers written with Jagdeep Bashir. Who's the chief investment officer at UC. And you might say to yourself, why the hell is it hard to recruit talent to Oakland, California? And it's not his last job was in Edmonton, Alberta.

Sloane Ortel (00:08:19):

The noted financial powerhouse. Yeah.

Ashby Monk (00:08:22):

And we were like, how the hell do we get people to come to Edmonton, Alberta? Which by the way, for those of you out there don't know I was born there so I can talk shit about it. It is minus 50 in the winter. So it it's a tough place to recruit for. It's not close enough to Calgary to kind of benefit from like the Rockies and all that stuff. And so we built this whole framework for thinking about how pension funds can attract the right talent. Now I know our question here is like, you know, how do we, as, as people navigate the process to get jobs to pension funds, but it's useful to think about how pension funds are also looking at, at, at talent because ultimately they build their strategies around, you know, human resources on these kind of key things.

Sloane Ortel (00:09:11):

I think it's a market with two sides, right?

Ashby Monk (00:09:15):

Yeah, exactly. Absolutely. And I think before I jumped into our little framework the key kind of things that we noted in our paper was that like these are often public agencies, so there's tons of constraints and challenges. Many of the big pension plans are located in cities. You've only read about like, you know, Juneau, Alaska is the home of the permanent fund or, you know, Everett, Washington, not Seattle is where Washington state investment board is. You know, it's Sacramento where CalPERS, it's not San Francisco Sacramento, doesn't quite have the same vibe, you know? And so a lot of these places are in these kind of frontier cities, which makes them a little bit more difficult to recruit for. And then the types of talent that these organizations are hiring for are changing. They need more investment capability instead of asset allocation, allocation capability.

Ashby Monk (00:10:09):

They're moving much more into alternative assets. So they're looking for people with private equity and hedge fund and venture capital and real estate. So it's a whole shifting paradigm of talent needs in places that you have never probably thought of going to work. And so we built this framework of how we design recruitment and that we called it the green, the gray and the grounded and the notion was: pension funds are incredibly good at hiring people that are zero to five years out of college. It's at that point that they are green and the salaries that you would earn at a public pension fund really aren't different, not multiples different from what you would get it, you know, McKinsey or as an investment banker. The gray or those people that have made all of their wealth and want to come back and kind of give back to their community. And so the salary doesn't matter as much. And then the grounded or those people that have some connection to the sponsor. You know, if you're from California, maybe you want to go work for CalPERS to save your state. If you are an alum of Stanford. Maybe you want to go work for Stanford management corporation. So we called it the green, the gray and the grounded. And then I had somebody this year, tell me, you forgot one of the G'S: gullible. And I was like, Oh, come on.

Ashby Monk (00:11:34):

This person was like, I love the gray, the green, and the grounded, but you also need to include gullible in your recruitment strategy. So the reason is you're starting to get it is the compensation is, is usually not sufficient to pull people out at mid career. And so they need some other reason to get involved. Like they want to get experience or they want to give back, or they want to live in a certain place where they can fly fish or, or they're gullible.

Sloane Ortel (00:12:06):

I mean, you know, like those are all valid reasons.

Ashby Monk (00:12:09):

Those are all valid. And we've, you know, that's been used by a few plans that I've worked with, but I'm curious, you know, we wrote that paper in 2013, it would be awesome to like, get an update and hear how pension funds are recruiting talent today. And the very least, you know, this is the job episode. Maybe we'll help somebody get a job.

Sloane Ortel (00:12:31):

I think that would be a lovely thing.

Ashby Monk (00:12:31):

We're calling somebody, we're calling Charles Skorina.

Sloane Ortel (00:12:36):

Of Charles Skorina and company, Yes?

Ashby Monk (00:12:38):


Charles Skorina (00:12:38):

This is Charles Skorina

Ashby Monk (00:12:38):

Charles! You're on with Ashby Monk, Sloane Ortel. We don't have free money for you, but we're hoping you have free advice.

Charles Skorina (00:12:53):

Oh, always free advice. Well, it costs 2 cents. You know,

Ashby Monk (00:12:58):

It's in the mail,

Charles Skorina (00:13:05):

Your topic is timely by the way, because I am writing a news piece as we speak about Kim Lou, who was just promoted to CIO at Columbia. I've done interviews with her in the past. She's terrific. And then in fact, I think I got the other magazines to take notice of her.

Ashby Monk (00:13:29):

She's incredible. I think she's CEO of Columbia management corporation now.

Sloane Ortel (00:13:34):

Formerly at Carnegie, right?

Ashby Monk (00:13:36):

That's right.

Charles Skorina (00:13:37):

Yeah. So she's stepped up about three times in assets. I estimate two to three times in comp and she deserves it. However, it is tough to, to the topic of your of our discussion today. If you're not in an endowment or foundation or possibly a nonprofit hospital system, your chances are roughly one third of moving into a mid or high level position. I, to prep for this topic, I went back and looked at a lot of the CIOs backgrounds. You know, the resumes I have now, most of them started in mutual funds or on wall street or in banks as analysts, and then transferred in to a, usually an analyst position at an endowment or foundation or, or a public pension.

Charles Skorina (00:14:54):

If you look at the progression, once you get about to manager level, really about, I don't think quite two thirds. I broke it down, we broke it down a couple of years ago, about 65% of the the hires at a manager level or above in an endowment or foundation came from other endowments and foundations. They didn't come from hospital systems or charities. They came from other endowments and foundations. Like Kim. And by the way, I'm joking in my piece, her office was 13 blocks away. Tell me New York isn't a small town.

Ashby Monk (00:15:44):

She's moving 13 blocks.

Charles Skorina (00:15:47):

Actually less. Eight down, three, over five more billion.

Ashby Monk (00:15:56):

So Charles, let me jump in and remind people that are listening. You're kind of a legend in this space because you write these awesome newsletters, which everybody should go to Charles Skorina and kind of log in to get these newsletters, because I'd say it's probably once a month you kind of update the world recruitment and endowment space in particular, you seem very well situated, but your world kind of goes beyond that into pension funds and all the asset owners.

Ashby Monk (00:16:29):

And we've just been talking a little bit about like often how the pension funds think about recruiting talent. We want to switch it to you now. And ask how do these organizations actually go about sourcing candidates? And what are the, like, what are the different sources they actually turn to when they're trying to get candidates in the door?

Charles Skorina (00:16:51):

Well, almost everyone now is bureaucratic enough so that they first post the job on their internal website. And then for example, what I was doing some work for Michigan state, my old undergraduate school, a couple of years ago, they have a procedure they must follow. You must post it internally. And then there's a, a list of like, indeed, LinkedIn, I forget there's a half a dozen sort of job sites that are really generational, whereas I didn't pay much attention to it. The 30 and 40 year olds go to these sites first. So at the low to mid levels, all the jobs are, are, are posted and then picked up by these career online and etc. Once you get to director level though, they tend to want to be a little quieter about the hiring. And fortunately that's why folks like me still have a job.

Ashby Monk (00:18:14):

Okay. So then, so, so it's really just the kind of lower and mid level careers that you would kind of expect to see job postings on LinkedIn. Once you get to the higher stuff, you really gotta just know the right people is what I hear you saying, because your job, I guess you're turning around and going out into the industry, looking for the hidden Jewel people that you know, the asset owners didn't know about.

Charles Skorina (00:18:40):

Well, I have an advantage in that I've been doing the newsletter and before that articles on venture capital for the San Jose Merc for a long time. So I have a kind of a readership and the bounce that comes along with it. So when I actually write about something I'm working on, I'll get inquiries from folks I didn't know, existed in many times. And not only that, when I send out my newsletter again, if there's a job, they get picked up by the sites. So

Sloane Ortel (00:19:23):

That's a great competitive advantage. I'm curious though, like, you know, so we've got the seniority kind of spectrum that we've talked about, right. Where, you know, at the lower level indeed, and the job sites, and then, you know, you better subscribe to the Skorina Letter. If you want to hear about the, you know, the more senior ones or the more nuanced ones, but I'm curious about that

Charles Skorina (00:19:44):

Actually the Skorina letter for what Skorina is working on, we don't talk about what Russel Reynolds or some of the others, however, to your point, for instance, did you know, I mean, we knew that there was a vacancy at the Columbia investment management company, but the only reason I know I knew who was doing it and, and kind of the progression, cause it wasn't posted and they really kept it quiet, but I knew a few folks were who were involved. And even though I wasn't directly involved, which broke my heart. Oh, it's a cold cruel world in general. You know, nobody knew I had a lot of folks calling, sending me an email, say, Hey, what's going on with this Columbia search? You know, again, I happen to know who was doing it. So, you know, I told a few of 'em, but, but it was very, very quiet.

Sloane Ortel (00:21:02):

I wonder, like, you know, so there's, there's sort of two questions here, right? Like there's, there's the you know, there's a question about the natural hiring appetite of these, of these organizations, right? Where, you know, if you're, I mean, you know, famously investment banks sort of, you know, pick up young talent, put them through two year programs, burn them out. And then it's sort of an up or out thing. You know, but I hope hopefully, and probably that's not happening at most of the pensions foundations and endowments. But I'm curious if you could go into each of these different organizations and talk a bit about the way that their natural appetites for talent might differ.

Charles Skorina (00:21:41):

Well, when I started my career on wall street, I started at chemical bank, which is now which ate about 10 other banks. And now they call themselves JP Morgan, but it was chemical bank and the chemical bank, they had a year long training program that we went through. It was really, really good. Most of those training programs at the banks are gone. They're too expensive. They don't do them anymore at endowments and foundations and pension funds. If you look at the size of a staff compared to Silicon Valley startups, they're tiny, you know, the biggest endowment in employment still, I think is Harvard with about 220. Now they've got quite a big back office staff, which Narv is trying to cut, but, and then you, UTIMCO, I think is, and then the biggest biggest public pension plans, CalPERS, what does CalPERS have? 60 people? I mean, they're,

Ashby Monk (00:23:00):

I think it's ramped. I think it's ramped over the last few years.

Charles Skorina (00:23:04):

I totally lost track, but compared to the dynamics of bureaucracies, they are really small and their training programs are nonexistent basically, which is why, again, I have a job because I, every now and then I write, why didn't you prepare a number two? They don't. I don't know it, you know, you could argue that maybe bringing in fresh talent is a, is a good thing. I would certainly argue that that's the case in Silicon Valley. You know, we're, we're, we have done a lot of work over the years and lived, but these staffs are tiny. So they, when they need to fill a hole, they almost always have to go outside.

Sloane Ortel (00:24:08):

This is a great point to talk about this concept of pedigree, which I sort of ripped on in the last episode a little bit, because there is a degree to which the concept, the word, the framing came about around the same time as the historical concept of eugenics. Right? The idea one's breeding would lead to an understanding of one's behavior. I wonder if you could talk a little bit about that and how it sort of plays into drives to boost diversity and kind of bring in talent from the outside.

Charles Skorina (00:24:41):

Well, I look at schools. So when we talk about pedigree as a, a search guy, I first think of what's your educational background because that does make a difference. If you not so much in, in the institutional investment world, although you do see a Chicago MBAs where I went, you know, will be recruited into some of the hedge funds, but for instance, Harvard, which has a terrific old boys network, nevertheless, in the investment world, I don't think it's a big draw. And I see again, as I looked at some of the resumes, the diversity of schools is terrific. Now, when it comes to race, that's a different deal. And that's what I've been writing about really when I took the call today with you.

Charles Skorina (00:25:52):

It's, if you're Caucasian, Asian, but mainly Caucasian here, you've got a far better chance of making CIO at an endowment or foundation period. If you're Asian, maybe, you've got a decent chance. Now I'm not talking about Wall Street right now. I'm not talking about the the I-banks and the hedge funds. I'm really talking now about the non profit side down with endowments, foundations, pension funds, it's still a pretty white world. And as you move up that ladder, it gets very white with I'd say Chinese as second. And what I'm mentioning in my news, if you are black, you have, I have at the moment 10 black CIO's that I've that I have from my database that I'm using for my article. That's going to come out on Tuesday 10. I have in my database of nonprofits, about 550. So that's less, that's less than 2% of all the nonprofits CIOs are African American. Men or women.

Charles Skorina (00:27:22):

Yeah. So from a pedigree standpoint, well, it depends on, you know, what, what classifications we, we are using. Women in general for the CIO position about a third of the CIO positions are women it's getting better than it was 20 years ago. When I counted like 17% or something about every five, five years, we do our own little census of chief investment officers and we kind of break it down by again by school, race, and that stuff. It's interesting.

Ashby Monk (00:28:10):

It's fascinating. I think you're touching on something that we've really focused on in this podcast, which is like, how, how do we kind of break this institutional capital from these these biases, you know, and obviously there are other biases, like we need hedge funds to meet our expected returns. You know, that's a bias. But then there's also like literal bias around race and gender. And it's one of the things that me as an academic at Stanford I've worked on. And, and I really kind of reconnected around a project, which she was referenced in the paper that was published in the proceedings of the National Academy of Sciences around where we identified racial bias in capital allocation. And one of the things we really want to do is to help candidates for, you know, fund RFPs, but also jobs candidates to know like, what are the things they should do to make sure that in this context where, like you say, there are networks and implicit biases, they're not overtly stated, but in your experience, what are the things people should be doing to put their best foot forward? Not just from the bias perspective, but in general, what are the, what are the traits of successful candidates and getting hired into these funds?

Charles Skorina (00:29:36):

Well, if we're talking about the, the various racial biases, it's a vicious circle because it comes back to education. For example, a friend of mine was the star, everything through high school, this kid is smart. He blew through Caltech half asleep, and he's now running a robotics company. And I talked to him and I asked him about who are the guys at Caltech? How did it break out in terms of race? Well, we got, we got a lot of Indians and we got a lot of Chinese. Well, what'd you think of them? He said, you know, they were good, but they weren't great. They were good because they studied the twice. As long as the rest of us, he said, I still eat them for lunch. I mean, this guy's brilliant, you know, one of those 1 million, but he said, I was paying attention to it as for women. And Afro-Americans zilch. Why? Well, the system is stacked against them, you know, how did the Indians and Chinese get into Caltech? They study day and night. It's like the kids that do the spelling bees, all they do to get into the 200 slots each year at Caltech. So that's just not set up for minority neighborhoods. They don't have the parents that are willing to spend the three hours at night. So I think it starts there. There's a whole bunch of things that we don't have control over.

Sloane Ortel (00:31:35):

Yeah. I mean, like, this is, you hear people talk about like systemic racism, right? Where these, like, you know, interlocking systems that are effectively oppressive kind of conspire against people from certain neighborhoods or of certain backgrounds, right? Like you know, if you have a situation where, you know, you're a single family home and the parent is working two jobs and then thus unable to invest in the, in the child's care or whatever, it's not exclusively a racialized dynamic, but it can be. And then you, on top of that have all these frictions in the way that people are assessed and related to inside of educational institutions. I'm curious, it sounds like what you're saying is that the, the, the pipeline of candidates is just, you know, that, that have the pedigree dynamics that these, that these foundations endowments, pensions look for in the form of like good education and the relevant experience is just very small, is that the right interpretation?

Charles Skorina (00:32:35):

I would say that's the right interpretation. And I have talked to Kim Lew about this, for example, when Lyndon Johnson's great society built up steam, you either the hard way to do it was to give kids the resources and if necessary the free education to get them into the best school, the easy way to do it. And the way they chose was to dumb down the requirements. For example, New York city had those you know, the Tech high schools, there's about, you know, the Bronx tech or Bronx sigh or whatever. There was about five or six of those schools. And Kim went to I think the Bronx, they were tough. You got into that, to that school. You were drilled for college. She said, so she got into college because Bronx now, now she came from a poor background and she had no favors done on the way up the ladder, but she got into that tough school and the teachers gave her a great high school start, but those schools are, you know, I mean, we could spend hours on what's happening in just the New York city school system, but they aren't what they were. So now you come out of those schools and are you prepared to get into college? And then when I interview and I said, well, how did you get into finance? Most of the women who are chief investment officers got in because they had a role model who was already working in finance.

Charles Skorina (00:34:31):

I mean, you'll see it with with my interview with Kim, you saw it with all of the lady who was at Emory. Mary Kay Hill. I mean, all the interviews, how did you get into this? Well, my mother's best friend was in finance and I thought it was so cool. Amy Fall at Rockefeller, the same thing. She, she had a mother's friend who, you know, was on wall street and she thought that was the coolest thing ever, but how many role models? So, you know, I'm talking about women right now because I'm doing the article, but I mean, we break it down. How many Afro American role models are there on wall street?

Sloane Ortel (00:35:15):


Charles Skorina (00:35:16):

How are you going to get a taste if you're a kid that has the potential, you still don't have a role model.

Sloane Ortel (00:35:26):

Yeah. Yeah. It's, it's really amazing. You know, it's funny you use the example of those schools. My mom was a bond trader at Solomon and at Lehman Brothers. And then she left that job and went to go teach AP Economics at Stuyvesant High School in New York city, which is one of those five magnet schools. And like, you know, it's, I mean, she's since passed away, but when she did so many of her former students now on wall street came to the funeral and talked like crazy about what it meant for them to see somebody, you know, who, you know, who, you know, was a little bit unconventional who had done these things who had put them on a path. So definitely that's a super powerful thing. I wonder about a structural force though. Like the there's a, this, you know, a listener wrote in about this really kind of insane situation where you know, out in Nebraska, they were doing a CIO search and it wound up actually leading to the names of all the finalists for the job being put in the public domain.

Charles Skorina (00:36:38):

Do you know who that was, because I did the university of Nebraska CIO search, but I don't know seriously. Was it the public pension or was it the university of Nebraska? Do you remember?

Sloane Ortel (00:36:55):

I have the PDF. I'll email it to you after this,

Charles Skorina (00:36:59):

Because I have found sometimes when we're writing about the outsource chief investment officer, how, how was the selection process? We will discover online notes, but it's almost always an accident. You know, they'll just post it online so that some of the other board members can pick it up and then forget to take it off or forget that Google just scooped it up. But when I saw that, I thought, Oh, well, the CIO is still there. So whatever happened, I guess I didn't hear about it. Which, which is good. Isn't that awful when you wrote that? I thought that's terrible.

Sloane Ortel (00:37:56):

That's the Nebraska investment council.

Charles Skorina (00:37:59):

That's the public pension fund,

Sloane Ortel (00:38:08):

So that wasn't you.

Charles Skorina (00:38:08):

But it does show you why that is. Why one of the reasons why I do not do searches for public pension systems, period, I will not. I get calls and I, well, I don't get calls saying, Charles, we want you to do the search. Please send us your invoice. No, it usually says, we'd you in our database. Now, what that really means is that we've already picked who we're going to use, but in order for me to justify picking this person, I have to have nine others that I can say I religiously went through and they just didn't meet our requirements. Well, I'm not going to feed into that. So then on top of that, I, once when one of the CIO's was at CalPERS that I knew, well, he said, look, get into the database. I spent hours online putting every last detail of my life. I can't imagine that a CIA or FBI job application would be any more detailed. And I thought after listening to security experts at city Corp or JP Morgan, you should never listen to those guys talk because we're, we're screwed. I mean, the Chinese and Russians are ripping us off, but I thought after that, I thought, Oh, and then CalPERS of course said, well, thank you. You know, you're one of 50 and we'll get around to you. But I thought in the meantime, in the meantime, I put everything on a public database. And as you see from your example, there's always somebody who leaves the back door, or even the front door.

Sloane Ortel (00:40:13):

Have you heard about this happening with other positions or something similar to this?

Charles Skorina (00:40:16):

Not, not with candidates for a senior position, I've, I've gotten notes after the fact about discussions about candidates, but they've been, the names have been crossed out. So I actually think fortunately that that was a most likely a mistake.

Ashby Monk (00:40:49):

Those candidates would have had jobs elsewhere. It would be pretty non-standard to put names out there for people who actually have current jobs.

Charles Skorina (00:41:03):

It would have been terrible! And by the way, It could easily lead to a lawsuit to.

Ashby Monk (00:41:10):

Well charles, we brought you on to help us understand how to navigate CalPERS' job market.

Sloane Ortel (00:41:23):

I mean, it's good to know that this is just complicated, right? At some level.

Charles Skorina (00:41:28):

For lower level positions, CalPERS puts out the know they'll post the ads for instance. And then they go through this elaborate process. And at the lower levels, they'll call some people in, I mean, it's pure state government bureaucracy at the higher level. Now yet again, they're going to do another search. And yet again, it will, although they've got 50 recruiters in the database, they already know who they're going to use. I mean, they may actually, it may be two or three firms. And they're now arguing at the board level whose firm gets to do the next search, but that's, that's, that's at CalPERS. More realistically the endowments. I mean, you get back to the core question in this podcast. Silos tend to hire from the same silos in institutional investing. So you, I will see somebody come in and they'll start their career up the nonprofit ladder after spending some time at Franklin Templeton or one of the wall street banks, they were just an analyst. And then they, it was almost random when I asked them, how'd you how'd, you get into University of Pennsylvania's investment office. They'll say "The job came up. I applied for it. And that was 15 years ago." But once you're in it, you tend to stay in. I'm not to segue too much, but there's investors wall street investors. They pick things: they pick equities. They pick stocks, they pick private equity, but Chief Investment of Nonprofits don't do direct investments. Most of them don't, they pick people and that's a very different they're listening to managers and those managers pick the equities. So as you move up the ladder, the skillsets diverge more and more wall street versus nonprofit CIO. And, and that's why you don't see that many CIO is jumping into wall street. Now the last CalPERS, I never can pronounce his name. The lawyer that left before Ming.

Sloane Ortel (00:44:17):

Ted Eliopolis?

Charles Skorina (00:44:17):

He was a little different, you know, he had a law background, he had a lot of wall street connections he has, but basically he was still brought in because of his Rolodex, his access. But in terms of actually selecting, you know, should I, should I buy Apple or should I buy a cold storage facility in Nebraska? I mean, that's not what he's doing. And I think that tends to be why as you move up the ladder, you see fewer and fewer candidates come from outside the silos.

Ashby Monk (00:45:02):

Right? Right. Well, Charles, look, I think we've taken more of your time than we said, we would.

Charles Skorina (00:45:10):

I'm here for you!

Sloane Ortel (00:45:14):

It's been so great.

Ashby Monk (00:45:16):

What we learned is when you need to go to a great school, get an entry level job, and then never leave. And then one day, you can be CIO of an endowment.

Charles Skorina (00:45:26):

One of my CIO recruits who is still on the job, he kids me. He said, how did you close the deal? Charles, you looked me in the eye and said, I can't tell you who it is. This is the best job you're ever going to have. And he said, you know, I thought about it. You laid it out for me. And I thought you're right. And he's making really good money. Great weekend. Bye bye.

Sloane Ortel (00:46:04):

So I guess my randomness construct from earlier holds up pretty well.

Ashby Monk (00:46:10):

Look, I mean, the sad thing is I thought he was going to like, talk about like exactly how you get in there. And he was a, he himself is as frustrated with the process at CalPERS and other public pensions, but I think what resonated for me and what he said, which I've found true and I'm sure you have too Sloane, is that it's a privleged network. And the network starts: you go to the right high school and you go to the right college and then you get the right finance job and that finance job gets you the entry level job. It's all baked very early in your life. It's really hard to break in your forties or your late thirties. It's all done. Exactly. Yeah.

Sloane Ortel (00:46:52):

It's funny, like, you know, and it's not just the endowments foundations, the pensions, like I, you know, I write this column for city wire about diversity and like the registered investment advisor space, which should be a lot more democratic. I mean, like, you know, it's a lot easier to start a registered investment advisor than it is to, you know, get a job at the Columbia university pension. Right. You just have to fill out the filing, but it's the diversity numbers are exactly the same. Like I quoted this person, Keith Beverly, who's one of the few CFA, CFPs on earth. Who's black in a column a couple of months ago. And he's like literally 99% of people are black. And then he sent me an academic paper.

Sloane Ortel (00:47:34):

You know, basically, sorry, 98% are white. Unlike, unlike in institutional investing a hundred percent of registered investment advisors are black. No, not now. Not true.

Ashby Monk (00:47:51):

I did like his comment about how we need more role models. A lot of the work I do with pension funds where I go in and I like help them design some new thing. I do it because I'm like, look, you could be a role model for others because that's actually how you drive change in this industry. They'll follow the leader, but somewhere you need somebody to lead and pensions struggle with leading. We've beaten this topic to death on this podcast in terms of innovation, but we need people to lead by like changing their hiring policies and really making a pledge towards a more diverse workforce because you know, the right proportion of black men and women in financial services should be 15%. Right. Yeah. Something like that.

Sloane Ortel (00:48:40):

If not higher. Yeah. And you know, I've seen firsthand the power of role models like which is, this is like, I can't believe I'm about to say this, but like, you know what, so when I came out as trans, like I knew of two other people who are trans on wall street. Right. and there were both like 55 year old folks who had run their own asset management firm and were like decamillionaires. You know, so like not the same degree of career risk. Right. and like, you know, I just didn't, I didn't know anyone in my same age or whatever. And now like three or four years later, I have this DM group on Twitter of like 10 other trans girls. You know, and like, I, you know, I've heard from folks at my old employer, like somebody wrote me, and was like, Sloane and you're my role model. And I'm like, Jesus Christ get a better role model. That's explicitly terrifying.

Ashby Monk (00:49:33):

You are though.

Sloane Ortel (00:49:33):

But that's freaking terrifying. Like the, you know, I mean, like, I don't know anything and like the, I think it speaks to just the paucity of of models for folks who fall a little bit outside of kind of the normal way of, of being and, and performing professionalism.

Ashby Monk (00:49:53):

Yeah. I mean, I, I, I wish there were more people like use long. I think you're, you know, you're an incredible role model. I mean, here we are, we're putting ourselves out there, you know, we're putting ourselves out there and talking about all these things on a weekly basis. And, you know, I, I've learned a ton from you. And so I think we, this is, I'm not surprised.

Ashby Monk (00:50:17):

I know you don't like the compliments.

Sloane Ortel (00:50:20):

Thank you, that's very nice. I learned a lot from you too, but with that said, it's time to change the subject or wait, it's time. It's time for Dear Ashby. This is the segment of the show where we take listener questions and an opportune time to mention that a listener question sparked the idea for this episode So if you are sitting there and you're wondering about something related to the world of pensions, sovereign funds, endowments and so forth or even queer stuff, whatever really write us at and while you're at it, maybe leave a review in the iTunes store or your podcast or of choice. That's a nice thing to do.

Ashby Monk (00:51:01):

Whoever leaves a review that says free money munchies, you'll get a free item from the Free Money Atelier. That's so true. Yeah. Yeah. Actually if you, if you leave a review that mentions F Anon also then I will literally buy something from the free money atelier and mail it to you.

Sloane Ortel (00:51:23):

You'll get a free pair of free money underwear.

Ashby Monk (00:51:27):

It's up to me to choose what you get, right? Yeah, exactly. Yeah. The, I mean, the underwear are shockingly unpopular. It's, I think we're in the triple digits in terms of the people who've bought on the, in terms of the, the revenue numbers or the number of people, the number of people really.

Sloane Ortel (00:51:45):

like three, 3.00.

Ashby Monk (00:51:49):

That's my favorite flight of the Conchords where he's like, talking about his number of dates he's had, he's like triple digits. Brett is like three isn't triple digits anyway, free buddy tip: watch flight of the conchords.

Sloane Ortel (00:52:10):

Yep, yep, yep. Yeah. It starts with F very aligned with F Anon.

Sloane Ortel (00:52:17):

So here's the first question. First question. You to talk about the rise of ESG investing, like it's a good thing. And I'm sure that's overwhelmingly true, but are there any dystopian consequences of ESG's growing popularity? This is, after all, 2020.

Ashby Monk (00:52:36):

For sure. I love this question. ESG has the potential to become a world of bullshit and disinformation if we don't do it right. And so like in the core, like I'd love to think that ESG leads to like deeper understanding, but information overload means information has no value. We have less knowledge, less understanding companies that are good, get lost companies that are bad bullshit their way to looking good. And so, yeah, like we need, we need ESG to come with more standards. That's what the sustainability accounting standards board has started to do with this notion of materiality, but there's a long ways to go. You know, somebody told me there's something like trillion dollars. It Jean Rogers on our show, $70 trillion of sustainable capital up there. Like, why aren't are all my problems solved? Why? Because it's baloney. And so that's the dystopian future we need to avoid where like, all information becomes meaningless because ESG becomes like Facebook.

Sloane Ortel (00:53:48):

Oh man. That's so that's so like Huxley. And, you know, I mean, like, in dystopia there's like the Orwell versus Huxley, you know, kind of, kind of continuum where like, on the one hand you have like the, you know, the apparatchiks controlling society explicitly subject to their whims. On the other hand, in the Huxley zone, you just are so inundated with information that you can't actually make sense of anything. I mean, it sounds like we're, we're very much in the latter zone.

Ashby Monk (00:54:17):

We could be. We could be, if we don't start to bring rules into this space, now the definition of alternative data for which ESG fits is data, not conventionally used in decision making. So it's hard to bring conventions around the unconventional, but we need to, we need some way of vetting, you know, and understanding the value of this data, where we can use it. And so that is the fear that, and I appreciate all your literary references that I don't quite understand, but.

Sloane Ortel (00:54:51):

It's really important if you're gonna, if you're gonna think about finance, it's really important to major in English Literature.

Ashby Monk (00:54:58):

That's important.

Sloane Ortel (00:55:00):

I mean, come on the world needs people who can re read medieval English. The all right. So next question is the the active ownership theme is really interesting. How long has it been going on? What is the first action by a longterm investor you're aware of that you would classify as active ownership?

Ashby Monk (00:55:22):

So funny, I don't think I would call active ownership interesting. It's like: How do you vote? How did you vote your proxy this quarter? Active ownership is important and it has the potential to be really interesting. I think for too long, it's been kind of like the less focused upon component of what all of these big pension funds and sovereign funds have as part of their job. You know, we think of investing as like picking things to buy, but investing is also managing the asset, which is about looking in and actively engaging with the ownership of the companies to change the governance. That's what active ownership refers to like an investor engaging and trying to influence the governance of companies, projects, et cetera, in order to add value. And for a long time, people thought that pension funds should just stay out of it, you know, like their government entities and what are they going to do to add value.

Ashby Monk (00:56:32):

And so all of these proxy voting industries emerged, and I have to say it was like, you know, we added more layers of intermediaries and frankly, the rise of passive funds and you know, zero fee products has led a lot of funds to generate revenue through securities lending. And when you lend your securities, you don't get the vote, the proxies, these are all the things that are.

Sloane Ortel (00:57:00):

Just as a 101 thing for folks. Large companies exist in this form of shareholder democracy, right? Where a lot of the time, you know, like every year you'll get a, what's called a proxy statement where they, you know, usually they'll have the most important thing that always gets written about in the news is something about manager pay approve the CEO pay package and stuff like that. But they'll also sometimes have proxies in relation to mergers, acquisitions, changes of strategies, spinoffs and interesting stuff like that.

Ashby Monk (00:57:34):

So that's shareholder democracy in which the tourists have the same vote as the citizens.

Sloane Ortel (00:57:41):

Indeedo. Yes, indeedo.

Ashby Monk (00:57:43):

That's the problem with our model of capitalism, the way that we've designed this with our public markets, as you can own this stock for one minute and have the same voice as somebody who's owned the stock for one decade and active ownership, the movement is about trying to empower those long holders of assets, the asset owners, to actually voice, you know, their desires in this process. And the first step, which I think was part of the user question is generally to participate in, you know, the annual meeting and vote your proxy on the various proxy resolutions that a company puts forward, which often includes composition of the board. Sometimes it includes like C suite pay, paying compensation packages and things like that. But it also is like really into climate change and things that I remember, like, I think Exxon was told to do, I forget what it was like they were there.

Sloane Ortel (00:58:47):

The shareholders wanted to... This is a Hiro thing. The shareholders large group led by the Japanese large Japanese tension took exxon aside and were like, Hey, we want better disclosure around climate risk and applied for an sec safe Harbor protection to keep them from making that disclosure, which is still like the most punk thing ever. What a bunch of wimps. It's amazing.

Ashby Monk (00:59:18):

All right. Last one.

Sloane Ortel (00:59:19):

Last question. You know, following on the dystopia theme, the giant NASDAQ whale quote unquote, that has been hoovering up equity options with a highly unusual appetite was revealed to be drum roll, please, SoftBank of all things. Doesn't this prove that asset managers should be more closely regulated.

Ashby Monk (00:59:44):

Of course the entity blamed for all of the insane valuations in Silicon Valley is now at fault for the ridiculous run up in tech equities over the last three months, the complete disconnect between the real economy and the financial economy. Of course it's softbank, not the fed. I don't have like a great answer for this one other than yet, like it's revealed, they, I think there was 50 billion in options.

Sloane Ortel (01:00:18):

Yeah, 50 billion In notional value of options.

Ashby Monk (01:00:19):

Yeah. I mean, is that, do you know, was it calls or puts?

Sloane Ortel (01:00:25):

it was calls, out of the money calls. And like the notional value is the, you know, the strike, you know, kind of it's not the market value, so it's not like as long as you're buying $50 billion worth of it, might've been like two, two or 3 billion, some, some relatively large number.

Ashby Monk (01:00:41):

It's a big bet though.

Sloane Ortel (01:00:42):

It's a big bet and it moves the market, right? Like, because options, markets are pretty thin, especially when they're out of the money. You know, so like, yeah, it was, I guess the recommendation though has to be: if anyone hasn't read SoftBank's earnings presentations and the PowerPoints that go alongside it you're missing.

Ashby Monk (01:01:05):

You'll see the level of detailed analysis that goes into these bets includes such things as drawings of the unicorns.

Sloane Ortel (01:01:16):

And like: Our strategy is be number one at everything.

Ashby Monk (01:01:21):

Well, guess what, you're the number one buyer of out of the money calls.

Sloane Ortel (01:01:27):

Like if, you know, maybe we'll roll out the free money vision fund.

Sloane Ortel (01:01:30):

After we do our SPAC,

Sloane Ortel (01:01:34):

After we do the SPAC, you know, we'll be like, alright, so, you know, sure. We raised, you know, a $500 million back, but what we really want to do is raise a $500 billion free money vision fund, where we will be the best at everything.

Ashby Monk (01:01:47):

Yeah. That's our number one goal. That's the, how we're raising the money. Number one is to be best. We're going to be number one. Thank you all so much for listening that about does it for this week, but we love you. Bye!

The State of State Finances


Hello and welcome to Free Money, a podcast/newsletter from Sloane Ortel and Ashby Monk about how long-term investors can free themselves from the shackles of short-term thinking.

If you’re new here, thanks for signing up!

If someone sent this your way or you found this post through Twitter or some other channel, be sure to sign up below. We publish most Tuesdays.

And now, a look at how state finances are weathering the COVID-19 Pandemic.

Imagine governing a state right now.

The best positioned public schools, parks departments, and police forces are merely contending with unprecedented times.

For most, they are unpredictable as well.

And neither condition is helped by a near-universal problem: there is not enough money.

America’s national government can deficit spend thanks to the Federal Reserve’s money printer, which famously goes “brrrrr.” But forty-six states and the District of Columbia have balanced budget requirements. So in the face of falling tax receipts, each must contend with an unpleasant question: how much spending to cut?

This is a classic no-win scenario.

In a time of economic scarcity, forced austerity is perhaps the worst thing that can happen. Without a spender of last resort, the snowball effects of recession roll on unchecked. And as mentioned earlier, that is bad.

We called Tobias Read for a practitioner view of the crisis. He’s the Treasurer of Oregon State, which means he’s responsible for debt management, economic policy, investment management, and acting as a central banker for the state’s agencies.

We’ve seen requests for state-level aid packages that range from a billion to a trillion dollars, so we started by asking him to clarify what is needed and the creative strategies Oregon has been using to raise funds.

Then, as you might expect, we started talking about pensions.

We went through what the state has done to steer its ~$111 Billion investment portfolio through the COVID crisis, including organizational changes and a potential new emerging manager program.

We also talked about why he hates his Ford Focus and loves #FAnon, the evidence-based conspiracy theory popular among Free Money listeners which involves wide-ranging deep state efforts to design effective policy and serve the interests of ordinary citizens.

You can check out the transcript here or click above to listen in your favorite podcast app.

We also touched on the lovely goods available at the Free Money Atelier. And as usual, we answered questions from listeners:

  1. I've interviewed at some public pensions over the years, and my impression has been that (at least for mid-career/non-CIO investment positions) there is a pronounced preference for promoting from within. Just curious if this impression is accurate, and if is it another manifestation of the organization-wide risk aversion? What are the characteristics of plans that seem to have a greater willingness to hire from outside the organization?

  2. There's some contention over whether having operations in the west bank - a contested region claimed by both Israel and Palestine - is an ESG issue. What's your take? 

  3. The federal reserve has decided to allow inflation to go higher than the fed's 2% target during a boom period, which effectively means rates will be lower for even longer. Would enough inflation effectively solve the student loan and debt crises? 

If you’d like us to answer a question from you on an upcoming show, write to

Thank you for reading & listening!

Nothing contained in this website or podcast should be construed as investment advice.

Free Money S02E10 Transcript

Featuring Oregon State Treasurer Tobias Read

Hello and welcome to Free Money, a podcast/newsletter from Sloane Ortel and Ashby Monk about how long-term investors can free themselves from the shackles of short-term thinking.

If you’re new here, thanks for signing up!

If someone sent this your way or you found this post through Twitter or some other channel, be sure to sign up below. We publish most Tuesdays.

And now, a transcript of this episode. Just a quick reminder first: none of this is investment advice. Also, this transcript has been edited for clarity and may differ somewhat from the recording. Enjoy!

Sloane Ortel (00:00:10):

Welcome to the free money podcast. It's where we bring you the Brooklyn-Bay Area consensus about institutional investing that you desperately crave.

Ashby Monk (00:00:17):

Yes, you do welcome. I guess for us it's Friday for everybody else it's Tuesday. Sorry it's Tuesday.

Sloane Ortel (00:00:23):

I mean, hopefully the fiscal crisis everywhere has been resolved by then. Right?

Ashby Monk (00:00:31):

I think we can hold out, It's 2020 Sloane, that's not gonna happen.

Sloane Ortel (00:00:37):

Yeah. I mean, it's really dire straights. I just searched fiscal crisis in Google news and the stuff that, I mean, it's like every state and local newspaper has a thing about the fiscal crisis. New York city is facing the worst fiscal crisis since the 1970s it's bleak.

Ashby Monk (00:00:54):

In California I think we're going to have like a 25 billion shortfall. And what a lot of people don't know about state governments, unlike federal governments is they have a balanced budget rule.

Sloane Ortel (00:01:12):

Oh yeah.

Ashby Monk (00:01:12):

That means they actually have to find a way to fill that shortfall before, you know, for the end of the budget year. So that's going to be some serious pain for a lot of States.

Sloane Ortel (00:01:24):

Yeah. I mean, like one of the ways that they're looking at resolving it in New York, I mean, cause we have a separate issue with the metropolitan transportation authority that runs this subways, the bridges and the tunnels. Like is just res taking off the subsidy on the subway and on the tunnel is making it like, which would, I think make the subway like $4.75, a fare up from $2.75. You know, that wouldn't cause added pain at all.

Ashby Monk (00:01:48):

No, no. And you know, talk about added incentive to get inside a subway with people coughing in the middle of COVID.

Sloane Ortel (00:01:57):

Oh, you know, I literally haven't been back in the subway since March. I can't believe I'm saying that, but yeah. I mean, like, it reminds me like when I was at Oppenheimer, I had this colleague Meredith Whitney who issued this, like at the time was like this really ballsy proclamation. And she had just called Citigroup cutting its dividend so people were really listening to her. And she was like, 15 States are going to go bankrupt in the next year.

Ashby Monk (00:02:23):

This is a bold statement.

Sloane Ortel (00:02:29):

I mean, especially, cause I'm not sure that we know how to have a state declare bankruptcy.

Ashby Monk (00:02:35):

No, I think we talked about this one time already where we're like, actually can go bankrupt. I think you'd actually have to change the rules. Yeah, yeah, yeah, exactly.

Sloane Ortel (00:02:44):

I mean, like there was a great back and forth between Cuomo, the governor of New York and Mitch McConnell like two or three weeks ago where he was like, I dare you, you know, change the law, I got your bankruptcy right here.

Ashby Monk (00:02:58):

Then they could dump public pension liabilities on the PBGC. Oh yeah. That would be a screw you to the federal government.

Sloane Ortel (00:03:09):

But like, honestly, what's kind of amazing to me about this is like every time I read, like, you know, Peter Orzag who was Obama's budget director you know, wrote something in a Meredith Whitney's case, were all about pension liabilities, grinding states out of economic relevance.

Ashby Monk (00:03:24):


Sloane Ortel (00:03:25):

And here we're actually talking about it. It's kind of maybe a, like an eventuality that may happen to some States and pensions had nothing to do with it.

Ashby Monk (00:03:35):

I think what's, what's amazing about this moment is this, this COVID crisis has just like completely screwed over States. A lot of the unemployment that, you know, many of us are getting States are paying for a big chunk of that. And worse, we don't even quite know how bad the revenue situation is because I think most States allowed us all to like delay our filing. And so like they're all sort of sitting there looking at way bigger numbers going out than they expected. And they don't quite know what's going to come back in in terms of, you know, tax revenue. And so it's a pretty precarious situation for states right now. We could see like, you know, mega cuts or even some wacky bond issuance that, you know, gets them where they need to go.

Sloane Ortel (00:04:36):

Yeah. Cue the benny hill theme song in the muni bond markets. I mean, it's crazy. It's like, this is just the sort of thing that Ben Bernanke has famously written his dissertation about right. Like the counter cyclical, you know, the need for a countercyclical investor and these economic downturns. Because like when the States get strained, right, as like, you know, the rest of us are all strained, they wind up exacerbating the existing downturn. If they're not careful,

Ashby Monk (00:05:06):

it's like Greece. It's like the last thing you want to do when your economy is tanking is cut all spending. You want to actually get the economy humming again by, you know, freeing up some cash and getting people out and spending if we're, you know, cutting jobs and cutting projects and, you know, doing all this sorts of stuff that you do when you have to balance your budget, it will, it will truly exacerbate this crisis. Not that anybody realizes there's a crisis because financial markets continue to hit all time highs.

Sloane Ortel (00:05:42):

I mean, no problem. As long as the Dow is at record highs, I don't care. You know, like who cares if a bunch of people starved, sorry, I just threw up in my mouth.

Ashby Monk (00:05:56):

How do you really feel?

Sloane Ortel (00:05:58):

I mean, it's, it's this funny thing where we just don't acknowledge this reality. That's right in front of us. And like, you know, the last time in the, you know, the big, great depression, right? The one that we all refer to, not the great recession you know, we had like the works progress administration that came out and basically just employed Americans to do all kinds of stuff. Right. Basically pick up a shovel and do anything. And like, that wound up creating some - like kind of in the vein of our conversation with Tom last week, right, where you can't really predict the nature that innovation is going to take in the future - I was playing around with a works project administration tool last weekend. That was like a whole bunch of pictures of New York city in the forties. And they just like, scraped it together with open data and made like an actually very cool thing out of it.

Ashby Monk (00:06:50):

Oh, wow. Yeah, it is interesting. One of the things, so not only are like there, not a lot of jobs and if, if States ended up cutting jobs in order to meet these like really difficult financial circumstances, but I also have a suspicion because I am at a university, but there are a lot of students taking this year off looking for jobs.

Ashby Monk (00:07:17):

You may actually end up with this like big influx of people that are taking a gap year or, or, or basically saying, look, I don't want to go do zoom phone calls for a year. Like, yeah, by the way, any student that comes to me, that's like, what should I do this year? I'm like take a year off. Like, by the way, this is not official Stanford policy, but like, like you don't have sports, you can't go to the dining hall, this sucks. And if you do something that like boosts your CV a little bit go do it. And it's like, those public works, like put Americans to work type projects. I could see a lot of young students wanting to go get involved with, but then I started thinking, Oh wait, like we want to hire Americans right now that really need jobs. You know? So it's hard. I mean, like we,

Sloane Ortel (00:08:16):

I guess we just gotta create a capacity to take as many of them and get them to do stuff, you know, and pay 'em for it, like some kind of basic income thing. But I hadn't even thought about the, you know, the ranks of college students joining the labor force suddenly.

Ashby Monk (00:08:31):

I can think of a few cases in the past week where people have sent me notes saying I'm taking the year off. Cause if you believe we're going to get a vaccine, you know, I think, our dear leader in his big speech yesterday promised to have a vaccine before election day. So if you actually believe some of that, then why the heck would you go to college this year when you could delay it for a year and have a normal life and you're off in college. And it was one of the greatest things I ever did.

Sloane Ortel (00:09:04):

Well I did too. And that's why I still work in finance and arguably it's not the greatest thing I ever did. I worked as a stockbroker.

Ashby Monk (00:09:08):

But I had two discs out in my lower backs so I was kind of obligated to take a year off. I remember I did like an internship at Bloomberg and all kinds of stuff that year. That really kind of helped me when I actually went to go get a job. So strange, such a strange existence right now, everybody trying to navigate this like completely crazy situation.

Sloane Ortel (00:09:41):

I mean, we're kind of just jerks who are Naval gazing, right? You know, we're sitting here like this could be an issue for the labor market, any grey Poupon I think maybe let's call someone who might be a little bit closer to the action.

Ashby Monk (00:10:04):

Let's do it. Who are the people who run finances at States?

Sloane Ortel (00:10:09):

Their treasurers. And shout out to Treasurers of states.

Ashby Monk (00:10:11):

Let's call a treasurer of a state.

Sloane Ortel (00:10:17):

We've been accused of being very New York and California-centric. So you know, let's, let's call the treasurer of Oregon.

New Speaker (00:10:23):

Let's do it. Tobias Read is a good friend of mine. He's agreed to subject himself to our banter.

Sloane Ortel (00:10:33):


Speaker 2 (00:10:38):

Hi Guys!

Ashby Monk (00:10:38):

You've got Ashby and Slonae from the free money podcast, we're calling you quasi-live. How are you today?

Tobias Read (00:10:46):

I'm worried about F-Anon, but I'm a believer. Maybe that's for another time.

Ashby Monk (00:10:56):

We don't want to... although it's probably useful for our conspiracy theory to have a state treasurer, legitimize F Anon.

Tobias Read (00:11:01):

I just need to know the secret handshakes and the symbols and the mythology, and so on. But it seems like something we should really be worried about.

Sloane Ortel (00:11:17):


Ashby Monk (00:11:17):

Before we jump into the questions that we have a few questions for you treasurer Read, let's just check in on you and your family. Are you guys, is everything okay there in Oregon?

Tobias Read (00:11:29):

I've been saying to everybody is that there are two things that are simultaneously true. We feel very lucky that everyone is healthy and that the adults are employed, but at the same time, and I know, you know about this, we have a 10, almost 11 year old daughter and a 7 year old son, so it's really hard. It's really hard. Both of these things are true. We are not alone in it by any stretch. It's an hour by hour kind of thing. We're both MBA's, my wife and I, but we're not educators. And so that's a challenge.

Ashby Monk (00:12:01):

Super hard. I mean, I have to tell you just like a random story. I almost put my hand through the wall the other day when the internet went out. Because like, both of my kids are on zoom we're doing remote school. I hear my kids rustling upstairs, and this is the hour when they're supposed to be occupied pstairs and I'm like, Whoa,

Speaker 3 (00:12:20):


New Speaker (00:12:21):

Our kids have unerring ability to discern the one or two times a week when both Heidi and I have some significant call or zoom meeting, and pick that time to have the physical fight or a meltdown. and it's unbelievable how they figure it out. By the way, this is also... I don't know quite as much about the Brooklyn seismic risk versus Bay area seismic risk. But in Oregon, I've been telling everybody, this is just practice for the aftermath of the Cascadia subduction event that is coming. There's a 40% chance of a nine or greater earthquake sometime in the next 50 years. And then we're going to look back with great nostalgia for that time we were quarantined with electricity and the internet and everything else. So this is just practice.

Sloane Ortel (00:13:30):


Ashby Monk (00:13:30):

And so one of the things we wanted to jump in with you first, before we get into the pensions on or anything else, we're going to ask you a little bit about the budgets and how you're managing it. Sloane, why don't you jump in?

Sloane Ortel (00:13:41):

Yeah, yeah. I mean, so I was reading some local press in Oregon and I saw that, you know, reports that Oregon was facing like a $1 billion budget deficit this year. But I also saw, you know, some stuff about a coalition of five Western States, which includes Oregon requesting like a trillion and California as well requesting like a trillion in federal aid through this Western States pact. That order of magnitude difference kinda makes it hard to understand what's going on fiscally. Can you maybe set us straight a little bit?

Speaker 3 (00:14:11):

Sure. So the first thing is every, every treasurer in the country has a different set of responsibilities. And in Oregon, I've got, you know, it's a microscopic almost invisible bully pulpit, but outside of that, I don't have a direct role in the state budget. So I can't, I can't speak to the specifics of that trillion dollar ask, but I do have a pretty decent understanding of, of how the budget works, why the support is critical for state and local governments. And here's what I know. Oregon in particular is way too reliant on the personal income tax. In fact, I think I've seen this somewhere in a legitimate academic analysis. We're more dependent on that source than any other state on any other single source. And of course that means that we go up and down with the rest of the economic cycle and that's what creates this projected $4 billion shortfall and over the next several... that is by the way over a about a $21 billion general fund budget over a two year cycle.

Tobias Read (00:15:20):

So if you add in that impact over the next five years, it's probably about $10 billion. And this comes in the context of an environment where we were just finally starting to make some significant improvements or investments in the K-12 funding. That's the biggest part of our budget. That's, you know, probably three decades after we started to see a property tax rebellion. We can thank you guys in California for that unwelcome export.

Ashby Monk (00:15:56):


Tobias Read (00:15:56):

We're back in this place where where this massive decline is hitting us right at the time and at the wrong time. And I think people forget how much the federal government and state governments are partners. You know, we're delivering a lot of those things and we are the ones that have to make sure that that social safety net is intact, but we don't have the ability to deficit spend or print our own money. So that I think is really what, what fits to the to the opportunity for, for States to band together. And I'd sure like to see the Congress, the Senate in particular doing their job, because, you know, as you guys know better than I, when when interest rates are this low, we can at the risk of being a little bit crude, we can sort of say "debt, schmedt, we got, we got immediate problems to fix."

Ashby Monk (00:16:54):

This is a family show.

Tobias Read (00:17:02):

So that's kind of the context. And the legislature has the governor has some really difficult choices right now, because we were in a, in a better position in one sense that we have a decent amount of reserves socked away from the economic expansion. But politically, increased revenues are not, not that viable right now. So they have to choose between how much reserves to use right now and how much to make cuts. And because we don't know the depth nor the duration of what we're in the middle of. To the extent legislators want to listen to me, I've been drawing on the experience of the school district, where we live in the last recession. Understandably, they did everything they could to avoid cutting teachers and days. And when they got to the end, it was a cliff, not a glide path. I've been saying to legislators, you know, Glidepath beats cliff. So be thoughtful.

Sloane Ortel (00:17:58):

That's really interesting. I mean, I guess whenever you hear like budget shortfalls I mean, I guess what if you're, if you've got the disease that Ashby and I have kind of what comes to mind is, is, you know, an opportunity for funding creativity.

Tobias Read (00:18:11):

I have that disease too. I think that's right. And you gotta think creatively, you got think long term. And I mean, lots of people said never waste a crisis, but we're in that spot.

Sloane Ortel (00:18:23):

Yeah. We were just talking right before about like kind of the need for some sort of, you know, force to be an investor. And, you know, and I wonder, like in terms of opportunities to raise funds, like I know that, you know, we're going to talk about ESG later, but you're an ESG issuer as well. You know, that seems like a, you know, something that may give you some experience and maybe some opportunities to raise some funds. Like how, how have those bonds been met in the market and like, what have you been able to use the proceeds for?

Tobias Read (00:18:53):

They are really attractive. We've done three different issuances. In our case, all of them to support affordable housing in different forms. The last one in June was $95 million, 15 year taxable, what we call sustainability bonds. And they, I think they were three or four times over subscribed. So that obviously has an impact and gives us the ability to get good terms and make sure that those, that those dollars can go further for us. It's been working really diligently to make sure that that we're confident about what we're representing to the lenders and, and developing the reputation. We're fortunate in Oregon to have a strong credit rating and we want to protect that and the chance to kind of expand that and take advantage of what I feel like people have associated with Oregon as a brand, really gives us hope, but we're trying to take that carefully and cautiously so that we don't get ahead of ourselves.

Tobias Read (00:20:01):

This affordable housing has been a good start. I'm hoping that we'll be able to put those other good, good uses as well.

Ashby Monk (00:20:10):

That's, that's interesting. I think shifting gears a little bit I want to talk to you about for a second, the Oregon public employee retirement fund, which those of us in the know call OPERF. You guys have actually made changes as a result of COVID-19. I think I saw there was like a push to reduce some risk, add some fixed income, but also talk around actually changing how you access opportunities, some shifting internally. Could you just talk a little bit in your capacity of being on the board there about how you've kind of made that fund, more resilient?

Tobias Read (00:20:56):

I'd be glad to, but let's, let's set some expectations here. Let's, let's admit that you two have surely forgotten more than I will ever know on the technical aspects of this. What I, what I think I can add here is, is in the role as an elected person. I mean, I try to be the skeptical consumer of the, of the technical experts that we're privileged to work with at treasury and represent the public in this, in this space. So the thing that I think is to start with is, is the approach we're really trying to take in general, not specific to COVID, but to acknowledge that we have, I know you guys have talked about regularly on the podcast expectations and obligations that go out a long, long way, which gives us the chance to think differently than a lot of other investors.

Tobias Read (00:21:55):

So we're never going to be, or at least we're trying never to be the highest of the high in bull markets. Similarly, we don't want to be the lowest in the low and in bear markets. So 2018 and 2019 are good examples of this. And in 2018 all in, we got 0.56%. When I say that to the public, they sort of gasp, and I say, this will sound better when I remind you that California lost 3.5% percent in 2018, then they sort of look a little more mollified. And I said, but then think about 2019 when we got 13.6%, almost twice our assumed rate of 7.2%, but that put us in like the 90th percentile of our peers. So we're gonna try to get what we can, but, but limit that risk over, over time. Our former CIO had had a nice analogy in explaining this and sort of making the point that there are different tools for different purposes. if I was going to go to the to the grocery, which, you know, we try to only do every two or three weeks these days, the electric car that sits in our driveway, the Ford focus - which by the way, I do not like very much at all - is perfectly appropriate, but if I'm going to go try to win the Indianapolis 500, I'm going to need a very different sort of car. So one way that we've had had, we tried to take this on, is to say, there are certain parts of the portfolio where we can hire people at much lower rates in Tigard, Oregon, then we might have to in, in Manhattan. And there are other places where we need that expertise those relationships and so on. And so we do have to buy the investment equivalent of the, of the race car.

Speaker 3 (00:23:44):

So that attitude really flows into a bunch of different parts of the portfolio we have, as you said, changed, changed our attitude about, about fixed income, really tried to emphasize lower risk approaches there. We've adjusted some of our, our allocations and targets. We've taken on a risk parity allocation for example, for the first time we've, we've added a currency overlay, not, not in seeking returns, but as a risk management strategy. One other one that, that I think totally flew under the radar we have a hybrid pension. So particularly for more recently hired people, there's a defined contribution portion of the pension. And until recently that portion was invested completely the same as the defined benefit portion. So you had the hypothetical 28 year old with the exact same exposure as the hypothetical 62 year old. And I don't have to be very smart to say that's a, that's a bad idea.

Tobias Read (00:24:50):

So there was a lot of behind the scenes maneuvering both on the implementation and on the politics. But we got that changed. So that defined contribution portion now slides into a suite of target date funds, which helps their, their individualized risk exposure, of course, but also insulates the fund as a whole from runs on the corpus, which could happen at the exact wrong time. So those are all elements and we recognize that this is going to be an ongoing journey. I really like the team that we have in place to keep us going in the right direction,

Sloane Ortel (00:25:34):

That also supports the long-term F anon deep state conspiracy to deliver risk adjusted returns to pensioners.

Tobias Read (00:25:39):

I like this part of the conspiracy, this is good. I can be on board with that.

Ashby Monk (00:25:46):

And that leaders in the government are actually trying to solve the defined contribution governance problem. Nobody realizes, we all joke about how bad the pension fund governance is for DB plans. But then we forget, so many of the defined contribution plans are leaving people completely unprepared for retirement because they're not managing the risk to the stage of life that they're in. So kudos to you.

Tobias Read (00:26:13):

And it's not just public pensions to, because as we've talked about before Oregon, and I'm flying our flag and saying this we're the first state in the country to operate an opt out IRA for people in the private sector who don't have it, we can call it Oregon saves, and we can pass a law that says, if you're an employer in Oregon that doesn't offer a retirement plan, you're now obligated to facilitate Oregon saves. And so it means, you'll say to your employees, unless you tell me otherwise 5% is going into your, to your IRA. And we've made that really simple too. So there's only three choices. You can, you have a capital preservation option, obviously low interest, low returns. You have an S&P 500 index. That's the most risky we get. And then a suite of target date funds. And if you don't tell us anything else, you wanna put your first thousand dollars in the capital preservation fund, and then everything else after that, into the target date fund, based on your age, you can adjust if you want to, but we've got now three years in, we've got 72,000 people who have funded IRAs, an average balance of about 800 bucks in a total of around $65 million, which goes up about a million dollars a week. So we're on our way helping people get there too. And that's proving to be really important in the COVID times because it's a roth, so they can use it as a, as an emergency fund if they need to. Some people are, but the really best news about that is even when they're using it, they're staying in the, in the, in the program. So continuing to save.

Sloane Ortel (00:27:40):

That's so cool. As the kids say, that's rad.

Speaker 3 (00:27:48):

If you asked me "how would you design it?" Basically exactly how you just described it. Preservation? That's your rainy day fund. Then the rest of it goes into appropriate risk return investments.

Sloane Ortel (00:27:59):

I have no edits.

Tobias Read (00:27:59):

There are few audiences, where I can actually quote a Nobel prize winner in a, in a sort of self-congratulatory way. But back in the days when there was a local financial press and we were rolling this program out the Oregonian reporter called me and asked me about it and I said, Hey, this is, you know, this is Richard Thaler's idea. So he called Richard Thaler. This was at the time when we were taking our art, we were doing our design and Washington state when a slightly different direction where they just created a marketplace. Well, the marketplace, we now know it didn't really work because nobody did anything with it, but they went this reporter who was doing his job, went and interviewed Thaler. And I should have cut this out of the, out of the paper and framed it. But the quote, the money quote from Thaler was "Oregon's approach is clearly superior." I'm very, very proud of that. And I have to find an old copy of the library or something.

Sloane Ortel (00:28:57):

Yeah. You finally got one over those suckers in Washington. And obviously, shots fired at Washington, at California, and at the Ford Focus.

Tobias Read (00:29:14):

I can't wait till the lease runs out, you guys have to tell me what the next electric vehicle needs to be.

Sloane Ortel (00:29:22):

That that's a, that's beyond my competence.

Tobias Read (00:29:25):

Why do you got a car? You talked about the lease options, right?

Sloane Ortel (00:29:32):

Yeah, yeah, yeah, yeah. It was. I mean, I am personally a subscriber to the "buy a 15 year old Toyota" school of car ownership.

Tobias Read (00:29:42):

We're about net neutral cause our electric vehicle is good. And then we have a gas hog car that has, cause we have to have a third row for carting around, you know, in the before times when Carpools were possible. So on that base our 15 year old Volvo is probably in line with your Toyota.

Speaker 4 (00:30:02):

It's good to get, to make sure that we compare you know, we're both indexed properly in the gas guzzling, third row seat department. But like I have an investing question for you, which is like, I was Googling around and I was really surprised, like I was reading a a piece somewhere and somebody was like, you know, yeah. "The Yale model for private equity investing", which is basically invest a ton in private equity works for all sorts of places. "It can work for States too! Look at Oregon. Oregon is a notable success story in private equity investing." And like, you know, I guess famously was one of the earlier investors in Kohlberg, Kravis and Roberts, which is now a behemoth. But like I, you know, I poked around your website a bit and from what I saw, it looked like the fund is kind of paring back private equity exposure.

Tobias Read (00:30:57):

Yeah, there's a couple of wrinkles to that story. I think we are, I think proud of the fact that we were the first state to be into private equity and that, that continues to to pay us dividends in terms of the relationships we've had. But we're, we're being, I think, smart about it and, and we are paring back the overall expansion. Our target right now is 17 and a half percent. We're a bit over that right now, but looking to draw that down over time. And I think that's really just a reflection of trying to take, take our foot off the gas a bit, but we've also been trying to make some other changes to the PE portfolio, which I think might even be potentially more significant. And that's in terms of how how we want to, the relationships we want to have.

Tobias Read (00:31:48):

So we've been trying to go fewer and deeper. We're very proud of our one of our investment officers who's developed, I think a pretty innovative way of saving money here in terms of co-investments. And we can talk about this cause it was a big part of of a public meeting several months ago. We're not so naive as to think we have special ability to pick the winners from losers in co-investment opportunities. So what we've done is to say we're going to take up proportional exposure to all the coinvestment opportunities and, and use that as a way to drive down fees and to better adjust our pacing challenges. We're a relatively big investor in this sense, and putting, putting those dollars to work at the right, the right pace can, can be challenging depending on what our limited number of relationships, how they line up in terms of timing.

Tobias Read (00:32:49):

So that's been, that's been exciting. And then, we're in the early stages of figuring out how an emerging manager program would work for us. I'm hopeful that that's not going to be too far in the future. How do we get that get that right. In terms of the benefits of being exposed to investors that are earlier on. That emerging manager term, I know it's kind of loaded. But I like it for removing one of the barriers we've seen in terms of high high end high tech size. So I actually, I would love to turn this question around for a minute and ask you guys, if we're able to go down this path, what kind of questions do you think we should be asking as we think about what that looks like and how to be effective in it?

Ashby Monk (00:33:41):

I'll start. Yeah. I mean, I think the term emerging manager is loaded with awesomeness. It's a license to innovate, which is one of the things I've always been good at. You know, you were one of the first to do evergreen. You did an evergreen private equity fund at one point, you know, an emerging manager program can be incredibly powerful because it gives you an opportunity to go and partner with really early stage managers. And if you get the governance right, if you get the funnel right, you should outperform. right. I mean, there's cases in particular, in the great state of Illinois where these programs don't outperform because they aren't great in terms of the governance and the oversight. I think you guys could do it and actually generate higher risk adjusted returns because the evidence is clear in small private equity funds, outperform big private equity funds. It's just hard to justify for pension funds, the hiring and the resourcing to run small mandates. Every single pension fund on earth is only investing in the behemoths. Well, where did the upstarts come along to challenge the status quo. My desire is for all the public pension plans to build emerging manager programs. If only to challenge the status quo and keep the fees and costs down.

Tobias Read (00:35:10):

This is what I mean. I think it gives us a chance to have those costs, benefits, and what I've been asking all the time, how do we avoid missing out on that smart team that figured out something new, but we can't, we can't talk to them cause they can't handle $150 million check.

Sloane Ortel (00:35:29):

And, you know, you may wind up like, I don't know, for some people emerging manager winds up touching on like diversity stuff.

Tobias Read (00:35:36):

That's what I meant by loaded as a term.

Sloane Ortel (00:35:40):

You know? And it's like, I, I think what's really interesting about that is like, I think the overall cause of diversity has been weakened by people using diversity as sort of an ex post justification for those sorts of programs. I E yeah, we didn't deliver return, but look at all the diverse managers we back. It is fine to view diversity as a good enough itself in my view. But you know, I think I would be explicit about that from the get.

Ashby Monk (00:36:11):

I think that's right. It's an ancillary benefit. We're doing this because we want returns. We'll also get a much more diverse cognitively and demographically and everything else before the next question, I will say, I think the fact that we have a lot of bias in financial markets in which, you know, people of color women don't get the interest from the LPs that maybe is fair. And I did a research project on this. You can actually negotiate better terms with diverse managers. And so in theory, you're capturing a mispricing and generating higher returns. And so those LPs that move aggressively into diverse managers may actually see out performance if it is done well. And I actually can think of one city pension plan, not far from me, that is literally conceptualizing a part of their venture program that is about making money, but the thesis is women and minorities as an access point that is not sufficiently mature. And so that's where they're kind of allocating their capital.

Ashby Monk (00:37:25):

But let me the question I want to ask you to buy us as we're kind of taking more of your time than we promised.

Tobias Read (00:37:31):

This is lots of fun for me. So I can go as long as you want.

Ashby Monk (00:37:35):

One of the things that for me, like the great missed connection, you know, and the great Wikipedia, if you ever read those missed connections. Anyways, the great missed connection in Oregon was the moment when I thought the Oregon investment council was going to be spun out into a management corporation, akin to the Canadian crown corporations, which would have allowed you to resource the platform as if it was truly an asset management platform. And, and for me, somebody that's constantly fighting for more resources in public pension plans. It was this great moment all the way up until the legislature voted it down. And so my question for you given you're an MBA and you kind of know how to properly resource organizations, are you still sending personalized hate mail to these legislators, or have you switched to anonymous pizza delivery?

Tobias Read (00:38:32):

Well, it's a good question first. I guess I would somewhat have to send them to myself cause I was there. I was, I was a legislator. So I got to correct one piece of it. They never voted it down. They just never voted, which was the problem. And I, I can, I can recall, you know, I served in the legislature for 10 years and I was never more mad than when I sat there. It was in the last days of the session, I got the bill to the floor of the house and I had the votes. And what I needed was a rule suspension to move it up for a vote in order to get there. And the the house Republicans would not grant the rule suspension cause they were mad about something else and the Senate Republicans and it was a whole thing. So we never got there.

Speaker 3 (00:39:28):

But at least you got close.

Tobias Read (00:39:32):

We did, and I think there's, there's a real silver lining in that because it, that effort revealed the potential of that spin out which is, which is, as you just said about having the resources and the independence and the autonomy, but the Oregon legislature was just not, not ready to go all the way there. And of course we're all familiar with that insanity definition about doing the same thing again and again. So that ultimately that was like the, I think the third try when we got that close. And so when I became treasurer, I did not want to keep banging my head against that wall. And I sort of took advantage of that, the contrast and, and went to the legislative leadership and said, look, there's a real need here. And there's some real benefits, but if that, that piece that, that having the public oversight in the form of the legislature is what you need, let's try to get the wind and, and have a more productive relationship. And so we've got just about all of it in terms of, of the the resources, the positions. That's there, we have to go back to the legislature and, and report in that way. And, you know, even if you, if you think that's not as healthy or not, as ideal as, as the Canadian model we've been, we've been given the positions that we've asked for. We've been able to maintain our constitutional independence on IT and the back office functions and all that sort of stuff. So I'm not sending them anonymous pizza, but there's, but there's also not hate mail going back and forth. So, you know, maybe we get to share a pizza when we, when we get back to that, that possibility in the in the after times.

Ashby Monk (00:41:20):

Sounds very practical.

Tobias Read (00:41:21):

It's the political answer, but it's true. Cause cause now we can do a lot of stuff that we, we weren't able to do before. One of our investment officers said we were, we were emaciated aspiring to skinny. Now we're kind of skinny on the, on the staffing levels, but that's better than emaciated.

Sloane Ortel (00:41:49):

Yeah. I want to also ask, I mean, like it's funny, I was, I was sitting with my girlfriend, last night and we were watching your reelection commercials.

Tobias Read (00:41:58):

You've got to get a better plan for your next next evening together.

Sloane Ortel (00:42:07):

Yeah. There's definitely an "angry at the movie choices" constituency in the free money listenership. It's funny, you know, we watched the most recent ones which I want to ask you about, but you know, we also left it on autoplay and we've seen the change in the way that you're running, right? Like the first time you kind of like ran as a regular treasurer and there was like the, you know, there were all the kids and there was the school district and stuff. Whereas this time your commercial is just sort of like, hi, I'm Tobias, I'm the treasurer. Have you guys heard about compound interest, which is highly rad a relative call, like, you know, you're not as great as compound interest or sort of an absolute call where, where you're sort of thinking, I am just not that great. I'll just change this.

Tobias Read (00:42:59):

Well, I guess it's some, some of both like, you know, if there's it's an acknowledgement that this is not about me, in a serious sort of way. Some other people have asked me, like, did you know, you're just assuming everyone knows you're great and maybe that's it, I don't need to remind people. But but joking aside, it's this is about, you know, an issue and an opportunity and I'm privileged to hold, hold the office. And I hope I can be reelected and keep doing it, but I'm not going to be treasurer forever. And if I can use the time I am able to be treasurer to drive that sort of interest to use the word, that's better. We made that video before COVID, so we also have to acknowledge that things look really different now, but at the same time that issue and the notion of thinking about the long run is always relevant. So whenever I get the chance to talk about financial security, whether it's, you know, Oregon saves or as that video talks about, the notion of saving for aspirations around education, I'm going to do it. And, and that gives me a better chance of achieving my own measure of success, where we're about to you know, start thinking about what our our commercial and our communications look like for the last nine and a half weeks of this campaign. And I don't know what it's, what it's going to be exactly yet, but I'm pretty confident. We're going to try to talk about the reality that people are experiencing right now around financial anxiety, and the ability to think about how interest can compound is a powerful thing.

Sloane Ortel (00:44:52):

Yeah. And it's an important message to get out there. I mean, just very, very cool.

Ashby Monk (00:44:57):

Remember when you sent, when you sent me some of those, and I was thinking to myself, political advertisements to go out of interest to people that was a requirement, and then you have to put your name at the end.

Tobias Read (00:45:22):

That's totally it. And we, I mean, when we talked about this, it was like, Oh, we would spend money on this. Let's do some place, something of value. They don't particularly care who is the person that's going to be treasurer. I mean, frankly, you know, when I'm, when I'm doing campaign calls right now, I typically get the answer like we have a treasurer. You're on the ballot?

Tobias Read (00:45:45):

Yes, yes. But here's why it's important and compound interest and help people get farther ahead. And it's also a really bipartisan nonpartisan issue. Cause I can say to my most conservative Republican friends listen, even if, you know, your only interest is in small government, you should like this because more people saving their own money means they're going to need less help from taxpayers later on. They can, they can get down with that. Now that's a bipartisan message, creating wealth and compounding. Treasurer Read. Thank you so much for sharing the insights of what it is to be managing a state's finances in the middle of a crisis. We just really appreciate it. So thanks again and have a great weekend listening to the podcast. So thank you for, for doing it. It's been fun to to promote what you're doing to to a variety of other people. I talked to a city economist yesterday who was not aware of the free money podcast, hopefully we'll we'll be adding to the listenership.

Sloane Ortel (00:46:53):

And hopefully the the F Anon faithful will speed you to a Swift and early reelection.

Tobias Read (00:46:59):

Is there anything I should should start saying in, in, in zoom rooms that would you know, send the message to the, to the right people in the right way

Sloane Ortel (00:47:09):

The code is to start a lot use a lot of words that begin with the letter F.

Tobias Read (00:47:15):

Dangerous. Yeah. Perfect. Perfect. I'll talk a lot about the Ford Focus.

Sloane Ortel (00:47:33):

That was a great interview.

Sloane Ortel (00:47:39):

Ford Focus: A car that Treasurer Read does not like, at all.

Sloane Ortel (00:47:45):

I absolutely hate it, but I support F-anon, you know, it's actually fun fact. My first car was a Ford focus.

Ashby Monk (00:47:55):

I thought Ford Focuses were like fun, Zippy, little cars, you know, they even have these like like sport versions that the guys on top gear thinker are amazing.

Sloane Ortel (00:48:06):

I had a little hatchback, he might have the, you know, the electric without his wasn't very Zippy, but, but I'm having so much fun imagining what, like Joe Biden's public service announcement commercial might be like, you know, I'm Joe Biden, have you guys heard of the Amtrak? This thing is great. You know, like Donald Trump's like, what's a federal agency he loves? Anyway....

Sloane Ortel (00:48:35):

It's time for Dear Ashby. This is the segment where we take questions from listeners and pretty please if you're out there listening, Send in a question. Write to That's and let us know what's on your mind. And you know, while you're at it, why not also leave us a review on the iTunes store? That's all for the greater good.

Ashby Monk (00:49:06):

if you liked, right. If you liked what Treasurer Read had to say, give us the credit. You know what I mean? We got him on the show,

Sloane Ortel (00:49:16):

The trademark free money alignment right here. If you like, what our guests say. All good things... all our doing. All bad things... not our fault.

Ashby Monk (00:49:30):

It's very true. Very true.

Sloane Ortel (00:49:33):

Well, here's a good question. We got right in from a listener. The listener writes, I've interviewed at some public pensions over the years, and my impression has been that at least for like mid career kind of non CIO investment positions, that there's a huge preference for promoting from within. I'm just wondering if this is accurate and if it's another manifestation of like the whole organization wide risk aversion thing that we talk about all the time. I'm sort of also wondering, like, what are the characteristics of plans that are more likely to hire from the outside?

Ashby Monk (00:50:04):

Yeah, that's a really awesome question in part, because I feel like we should be demystifying the process to get a job at these plans. These are great jobs often times, and you know, you learn a lot and you get to meet some incredible people in the process. So I have a suspicion that our question writer lives in America. Okay. I don't have only an American audience, but my guess is this person lives in America because in America getting a job at a pension fund is often like getting a job at the government. It's weird. You know, you get to fill out weird forms. Are you in the union? You know, it's strange questions. Whereas if this listener was maybe in Canada or in Australia, it would feel a lot more like a traditional finance job where the competencies brought to the table would be sufficient to get the job in the U S it can be more difficult than that. And and so that's a big part of like, when I talked to Treasurer Read about like properly resourcing pension funds and like, you know, that's about getting the hiring process, right. And like giving clarity to people who apply to jobs, what the process is, you know, transparently inform people. What are you looking for? What are the standards too often? I hear people say, I don't even know how to like, get a job at a county pension plan, you know, like go about doing that. Like, and if they ask me, I'm like, I think pensions and investments magazine has the list of jobs? Like a job board. I don't even know how to tell you to look. I mean, we're working,

Sloane Ortel (00:51:48):

We're working on getting a recruiter on as a guest in a future episode for help to help us demystify it so that we can demystify it for you.

Ashby Monk (00:51:59):

I have to also admit, like, I get emails all the time from people in the industry that are like, Oh, shoot, CalPERS has a CIO job. Like, how the hell do I even apply for, you know, getting a bunch of CVS this past week because Ben's leaving. And everybody's like, I don't even know how to apply, you know? And so I think somehow this has to be a little bit simpler than what it appears to the outside world. Like we need to work on that.

Sloane Ortel (00:52:30):

Yeah. I mean, like one thing that's kind of crazy about this stuff is how much hiring tends to be predicated on like pedigree.

Ashby Monk (00:52:36):

I know, like,

New Speaker (00:52:37):

which is just so, I mean, it's like inherently eugenics, it's literally eugenics, but literally yeah, exactly. Anyway more on that later, stay tuned.

New Speaker (00:52:52):

Yeah, stay tuned for our next episode on eugenics.

New Speaker (00:52:52):

Or getting a job, you know, we'll see. It's a grab bag. There's some contention over - this is another question - over whether having operations in the West bank, the contested region claimed by both Israel and Palestine is an ESG issue. And you know, I'm curious what your take is on this.

Ashby Monk (00:53:20):

Yeah. It's a boy. It's the type of question you could get yourself in trouble on.

Sloane Ortel (00:53:25):

Yeah, a non-controversial one, right?

New Speaker (00:53:29):

Yeah. I had, I had one of those last week. I got a little bit worried about, but I'm not going to mention it again. Anyway. I think it should not be an ESG issue because I think local prosperity in, in these regions often will drive more international interests and a deepening of international relationships. And so where we have like international actors investing in West bank or territories or wherever, I think there's probably more eyeballs on it, which forces people to be more, either respectful or respect the rule of law or whatever. I think the worst thing you can do is completely ignore it. It's not quite the same as like the argument people make around like, Oh, I'm invested in Exxon so I can vote my shares. I'm not trying to make that argument. It's a little bit different. It's like, first of all, we want to lift these people up out of poverty and like they're living in poverty and they can't travel. We all seen the, you know, seeing what's going on. But at the same time, like getting international exposure and, and giving people, actually giving investors a stake, like a literal economic stake in the wealth of this region in my mind, can't help but improve the overall situation. I don't want to legitimize any like, you know, political activity that is you know, not necessarily legitimate, but I do try and raise these people up and give them a better life and, and paying attention to this zone in a way that isn't totally politicized will sort of open the door for more opportunities. That's my incredibly diplomatic response to a tough, it's a really tough, I mean,

Sloane Ortel (00:55:22):

like it's kind of an interesting meta-issue, right? Like, remember when we did, we did that thing on the I think it was a while ago, there was an ETF that got issued that it was, that was like betting against the LGBT agenda.

Ashby Monk (00:55:35):

That was the Christian values ETF, right?

Ashby Monk (00:55:44):

Its prospectus was like, we avoid the gay industries.

Sloane Ortel (00:55:52):

Yeah, exactly. All we do is, you know,

Ashby Monk (00:55:55):

trucks and trucks.

Sloane Ortel (00:55:58):

Yeah like, well, sweetie, if you don't think truck stops are gay, I have something to tell you. But the near Ashby, Oh yeah. Oh man. I don't have the horn handy. But yeah, cause like, I obviously don't think that's an ESG issue, but I guess in some ways, ESG is in the eye of the beholder.

Ashby Monk (00:56:23):

Yeah. The S means Social. And so people are thinking, you know, there's a, there's a whole society in the West Bank That's getting, you know, marginalized. And so should we be in that marginalization? And you know, this is one of the hardest things to figure out.

Sloane Ortel (00:56:41):

And to your point that like, just being there is good. I mean like foreign corporations, when they show up demonstrably improved conditions, a lot of the time, like all American corporations have to do foreign corrupt practices, act stuff, and they're still subject to American law overseas. That's right. Anyway last question of the day this is I'm very excited about this one, as you know the federal reserve has decided to allow inflation to go higher than the Fed's 2% target during a boom period, which effectively means rates are gonna be lower for longer. That's just forever, you know, lower forever. Would that solve the student loan and debt crisis?

Ashby Monk (00:57:23):

Let's take the first part, which to me it's hilarious. It's like the whole point is inflation. Like, yup.

Sloane Ortel (00:57:33):

That was the express point, but there's no inflation.

New Speaker (00:57:36):

Yeah. So that's great. So let's keep rates low. I mean, to me, this is like, how can we juice the stock market even more? Let's tell the market that even if inflation goes up, it doesn't have to worry. We're going to keep rates low, right? Because if inflation ticked up, markets would get hammered because everybody would assume, Oh, the fed is going to lower rates. But so now the fed has even preempted that by say, Hey, if you see inflation go up, don't worry. We're going to keep the taps on. You're going to have your party until the election and then we'll figure it out. So that's the first part, which I think is like almost blatantly political, even though people will tell me it's not political and that this is all just about economics. But to me that.

Sloane Ortel (00:58:21):

The federal reserve is a hundred percent independent. How dare you suggest it could be subject to political interference?

Ashby Monk (00:58:27):

This was a Jackson hole policy development. It's like, come on. The neat thing is, you know, a lot of loans are tied to interest rates. And like, there was always this balance where, you know, as inflation crept up, so did your borrowing costs, right? So there was always this notion that like, you, you know, heads, you win tails, you lose when it came to your debts, but like the fat, you nailed it in your question or whoever is it's like, actually, if they're gonna leave rates low in the face of inflation, you actually could get cheaper loans because the dollars you're sending in are worth less, but your borrowing costs are staying low. And so this person has astutely pointed out that, yeah, it's not going to resolve the crisis because I don't expect we're headed to 50% inflation.

Sloane Ortel (00:59:26):

And that would create other crises,

Ashby Monk (00:59:28):

But might you have 14 extra dollars at the end of the year? Yeah, you might.

Sloane Ortel (00:59:33):

Hey, that's something right. You know, 14 bucks, 14 bucks a pay period. Hell yeah. An extra movie on Comcast or whatever.

Sloane Ortel (00:59:46):

Exactly. You can give it to the monopolists immediately. Well, I guess that about does it for this week. And you know what I guess, because of the inflation at the end of this, I have a special treat for all of you out there and listen to our land. Ashley knows what's coming hit it. It's the is the bank of Jamaica's song about stable, predictable inflation, which just dropped today. Enjoy have a great time. We love you. Bye.

Bank of Jamaica Inflation Song (01:00:18):

When inflation stable and predictable, that's the way to go into a new inflation beat. We have a brand new son [inaudible] but brave doesn't get busy. [inaudible] The private sector. No, no, no. When inflation stable and predictable, that's the way to go.

Can The Government Really Spark Innovation?


Hello and welcome to Free Money, a podcast/newsletter from Sloane Ortel and Ashby Monk about how long-term investors can free themselves from the shackles of short-term thinking.

If you’re new here, thanks for signing up!

If someone sent this your way or you found this post through Twitter or some other channel, be sure to sign up below. We publish most Tuesdays.

This is the 23rd episode of the podcast since we launched last July. More than 380 people tuned into our last episode, which we hope will continue to grow over the coming weeks, months, and years.

So if you like what you read/hear, please share this episode and tell your friends.


And now, it’s time for the episode.

Where do innovative products and services come from?

You might imagine that we have the “invisible hand” of the free market to thank. But in lots of cases, the answer is government-supported research.

Consider your smartphone. It uses technologies like GPS, advanced transistors, active-matrix liquid-crystal displays, voice recognition, and graphical web browsers. All of these began their lives as government projects.

But not all government agencies are natural innovators. Public pensions, which we talk about a lot in these pages, are notoriously stuck in their ways. In fact, Ashby shared at the beginning of this episode that “the only way you get fired from a public pension plan is if you innovate.”

Clearly, this sucks and is bad. Is there any hope for these organizations?

Our guest Tom Kalil offered plenty.

He spent sixteen years at The White House leading science, technology, and innovation oriented policy programs under Presidents Clinton and Obama, and now works as the Chief Innovation Officer at Schmidt Futures, the group led by former Google CEO Eric Schmidt and his wife Wendy.

He shared why he identifies as a Meliorist, talked about various mechanisms the government has employed to boost innovation in the past, and the extent to which the work he and his colleagues did has survived the Trump Administration. You can check out the transcript here or click above to listen in your favorite podcast app.

We also talked about the many delightful things available for sale at the Free Money Atelier. And as usual, we answered questions from listeners:

  • Given the rise in "SPAC" issuance, should we expect to see the Free Money podcast float a "blank check" IPO of its own anytime soon?

  • Is it true that a pension funding debate plays a significant background role in the ongoing US Post Office debacle?

  • It's been a year since that famous/infamous business roundtable statement about the purpose of a corporation. How are firms doing? Is there a meaningful difference between corporate social responsibility and corporate actual responsibility

If you’d like us to answer a question from you on an upcoming show, write to

Thanks for reading & listening!

Nothing contained in this website or podcast should be construed as investment advice.

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