Michael Trotsky formally added the role of chief investment officer to his responsibilities at the $49 billion Massachusetts Pension Reserves Investment Management Board, where he already serves as executive director. MassPRIM’s board formally approved the appointment after the state’s treasurer, Steve Grossman, suggested that he take the role to help jump start hiring at the pension following a slew of departures.
Trotsky, who has been at MassPRIM for only two years, had been serving as interim chief investment officer since the June departure of Stanley Mavromates, Jr., who left to join Mercer, the Marsh & McLennan-owned consulting firm, as its chief investment officer.
Without a permanent CIO, Grossman and Trotsky were said to be concerned that it would be difficult to hire other senior officers who could be apprehensive about joining MassPRIM without knowing who their boss might be. Trotsky’s appointment resolves that issue, but there is still much to be done in filling several key positions, especially in private equity.
MassPRIM has been without a head of private equity since July 2011, when Wayne Smith left to join Pathway Capital Management, a fund of funds firm. Just three months later, the second-most senior private equity manager, Michael Langdon, left to join Hermes Global Private Equity to be the head of that firm’s Boston office.
Since that time, the pace of private equity commitments has been slow, and the pension has so far committed less this year than it previously indicated it would. Overall, MassPRIM has nearly $5.9 billion invested in private equity, an allocation of 12 percent.
Among the key reasons for staff defections is compensation. As the head manager of one of the nation’s largest pensions, Trotsky was paid just $245,000, with the possibility of a small bonus. Now, with the added responsibilities of chief investment officer, his salary will be raised to $295,000, a level that is substantially less than top money managers can make in the private sector.