San Diego County to Outsource Investment Chief Job

August 7, 2009 ( - After a nationwide search and a dozen interviews, the San Diego County Employees Retirement Association board voted 6-3 to outsource the job of investment chief.

The San Diego Union-Tribune reports that five months after its chief investment officer quit amid heavy financial losses, the board decided to replace him with a portfolio strategist on a contract basis.

Association executive Brian White told the board that constraints it had on salaries made it difficult to find top-level talent, according to the newspaper.   He said the base pay for the new strategist would be $600,000, with an opportunity to double that through incentive pay.

The news report said pension system officials received 130 or more résumés as a result of their nationwide search and interviewed 12 finalists. They favor a specific candidate but did not release the person’s name because the job has not been formally offered and accepted.

The former investment official, David Deutsch, resigned in March after the fund he managed lost more than $2.5 billion (see SDCERA Opens CIO Search ). Deutsch earned a base salary of about $210,000.

There was some controversy among the board about the potential $1.2 million salary to be paid. Most board members said added investment earnings would make up for the increased compensation, and

Board member James Feeley said the system needs to be innovative to compete with private-sector money managers.

However, County Supervisor Dianne Jacob, Treasurer-Tax Collector Dan McAllister and board member David Myers opposed the recommendation. Jacob noted that the pension fund grew from $5.4 billion to $6.2 billion after Deutsch left – an $800 million increase without the benefit of a chief investment officer. “I’m not convinced at this point we need to spend that kind of money,” she said, according to the Union-Tribune.

The pension fund has been overseen on an interim basis by Deutsch’s former assistant, Lisa Needle.

According to a comparison prepared by White, the Sacramento County chief investment official’s salary range tops out at $152,549 per year. In Orange County, the top of the range is $222,560, and in San Bernardino County, it’s $342,000.

The San Diego County pension system serves about 37,000 current and former employees.