By Barbara Mack, Research and Publications Manager, CAIA Association
BM: What is your background, how did you get into finance, and how did you discover CAIA?
LPC: In a nutshell, I have a Bachelor’s degree in economics and international business from Sam Houston State University in Texas and an MBA from the University of Miami. I have been doing private markets work since 1992.
However, I was somewhat propelled into private markets investing without much of a plan. After earning my Bachelor’s degree, I taught a number of business classes at a small college in the Cayman Islands as a way of keeping my brain active while selecting and applying for entrance to graduate school. By chance, I was asked to meet and interview with senior professionals of a Saudi family office that focused on private equity. Not my plan at the time, but shortly after being brought on board, I became enamored with private markets investing and ultimately remained with the family office for ten years. Thereafter, I joined the Houston Firefighters’ Relief and Retirement Fund (HFRRF) and have already eclipsed my ten-year anniversary here.
My time with HFRRF has flown by, perhaps because I have spent most of this time with the same investment team. Not only is our small team extremely cohesive, but we’ve performed well. For the ten-year period ending June 30, 2013, the HFRRF investment portfolio earned a return of 9.7% - ranking first of 99 public pension funds in the Wilshire’s Trust Universe Comparison’s Report.
I am currently the only HFRRF CAIA charter holder, but not for long!
I actually do not remember how I discovered the CAIA designation, but I thought that it was something that would be beneficial and so I took the first exam in 2005 and the second in 2006. I actually enjoyed preparing for the tests. They gave me a chance to go back and revisit asset classes and concepts that I had not worked with or studied meaningfully in a while. After the exams, I kept in touch with CAIA through volunteer efforts. That too has also been extremely rewarding. First, there is the immersion in the materials, taking the time to read current academic and practitioner materials, creating questions, and thinking about how important a given area is to someone taking the Level I or Level II exam - it’s a unique way to work within your asset class. Second is being connected with a group of peers. For example, I was on a private equity task force with a number of well-regarded practitioners and authors. The opportunity to work with, not just meet or converse, but to think and to collaborate with this group of people was brilliant. These more meaningful volunteer efforts have deepened my relationships with a number of industry professionals. I’m not just networking; I’m working with like-minded people in finance. I’m getting to know these people and they are getting to know me.
In addition, every now and then I get a call from someone who says, “I see that you are a CAIA member and I am thinking about taking the exam…” Or, “I am in Houston, can we go grab a cup of coffee?” So, the designation has opened up a number of networks, which is very positive for me.
BM: Do you have any general observations about Texas, or, more specifically, the private equity landscape there?
LPC: Since the early 1980s, Texas, and Houston in particular, has made concerted efforts to diversify its economy. Although known for its place in the petrochemical industry and as home to the Johnson Space Center, the Houston economy is supported by so much more. The Texas Medical Center is one of the largest medical complexes in the world. Manufacturing and manufacturing capacity are also serving Houston well; so much so that in January 2013, Houston was ranked #1 among the top US manufacturing cities by Manufacturers’ News. The importance of Houston as trading hub into/out of the U.S. has expanded as well. During the global financial crisis, many states felt the effects of the crisis to a much greater extent than we did. The economy, while not infallible, proved to be fairly resilient through this period. We are very fortunate.
In regard to private equity, Texas has some of the largest and most sophisticated programs: Teacher Retirement System of Texas, University of Texas Investment Management Co. (UTIMCO), Employees Retirement System of Texas, and a number of other public pension plans, endowments, foundations and family offices. Notably, in a recent study of 5-year and 10-year private equity returns of public pension plans, the Private Equity Growth Capital Council (PEGCC) found that Texas holds two of the top ten spots (#3 and #4) of the 160 or so plans in their study. I’m thrilled to say that the portfolio that I’ve managed for over ten years took the #4 spot with a 13.6% annualized return over the last 10 years, and 9.3% over the last five years.
BM: Besides focusing on investment, are you interested in sports, or do you have any unusual pastimes?
LPC: I enjoy running and will do anything from 5K up to a half marathon. I also will do “fun runs” - the Warrior Dash, Firefly Run, and other not-so-serious runs. I also pick up the guitar every once and a while.
More recently, I have started to write. In fact, I co-authored “An LP’s framework for evaluating GP succession,” a chapter in PEI’s January 2014 publication Succession Planning in Private Equity with Dan Feder, Managing Director, Private Markets for Washington University in St. Louis Investment Management Company.
BM: What would you tell others that are considering CAIA?
For those who are considering CAIA membership (and those who are already members), I would strongly recommend that they volunteer with the organization. It is an effective way to network meaningfully, contribute to your industry, and engage yourself with your asset class in a unique way.
