Once McCusker becomes president in January, he will work with Manning, who will stay on as CEO for the next 12 months before taking on an advisory role at the firm in 2027. Sarah Samuels, a partner at NEPC overseeing investment manager selection at the firm, has been appointed to CIO.
We’ve seen more companies in the industry take this phased approach to leadership transition (GEM Investments is doing something similar). But of course, so too has NEPC: Since part of the firm’s remit on evaluating managers includes analyzing leadership succession plans, the firm has benefited from a broad view of what makes transitions successful.
I recently spoke with members of the leadership team at NEPC about their succession plan, and they all emphasized the importance of continuity for this transition. After all, McCusker has been with the firm for nearly two decades.
“I wouldn’t expect a huge change, because Sarah and Tim have been a part of the evolution” of NEPC over the last several years, Manning said, adding that while there are things the firm doesn’t want to change, like its culture, the team plans “to deliver in different markets and deliver in different ways, be it in private markets or finding ways to serve the wealth channel or innovations in the DB channel.”
In other words: “We’re hoping to continue to evolve” and “not just be reactive,” according to Manning.
Samuels added that this move will provide growth opportunities for the investment team. “The cornerstone of this transition is continuity and strength,” she said.
McCusker agreed: “Our clients should not expect any change,” he said before adding that there’s “a generation of emerging leaders at NEPC; it’s not just Sarah and myself.”
McCusker said he recognizes the challenges in the industry — fee pressure, the search for new capital — but with a 14-year OCIO track record and more than 70 people on the investment team, “We see a ton of opportunities as well.”
Adding Diversity Through Diligence: As the search for capital intensifies, more allocators are casting a wider net for diverse managers. At the Allocator Collective’s anniversary celebration in New York on December 1, Trinity Church CIO Meredith Jenkins told attendees how her team has refined its process for sourcing diverse managers over the past year.
On a panel discussing sourcing and evaluating diverse managers, Jenkins explained that if someone from the investment team wants to recommend a new manager for the downtown Manhattan church’s $6 billion portfolio, that person must also “include a handful of similar managers in terms of investment focus, style, and opportunity set that they’re pursuing. And within that pool of managers, there have to be very clear, diverse aspects that each manager has.”
Trinity Church’s process also involves asking peers, service providers, and investment consultants like Cambridge Associates which managers might be missing from the list. The team also checks the Allocator Collective’s database of over 700 diverse managers for the particular investment opportunity.
“In some cases, that might lead you to someone that’s more interesting than the one that you actually thought you were going to recommend,” Jenkins said. “In other cases, it allows the team to have a more thorough discussion about what the opportunity set is out there and how you got to the one that you decided to recommend to the team.”
The idea is to show that the team has evaluated “a very fulsome circle of managers” before recommending one for the portfolio. “It’s required as a mental exercise as well as an actual diligence exercise,” Jenkins said. Currently, 62 percent of the portfolio is a typically diversified endowment, with 38 percent in real estate.
So. Allocators. What’s your approach to adding diversity to your portfolios? Shoot me a line and let me know. In the words of Ms. Carey, all I want for Christmas is (to hear from) you.
