Investing and Banking & Finance and Public Pensions and Government & Economic Development and Government

New Jersey names Indiana's Walsh to head investment division

July 8, 2010

Timothy Walsh, the chief investment officer of Indiana’s pension fund for teachers, has been named director of the New Jersey Division of Investment, manager of the 10th-largest public retirement system in the U.S.

New Jersey Treasurer Andrew Eristoff announced the appointment Thursday of Walsh, a 25-year veteran of the investment business. He replaces William Clark, who stepped down Feb. 5 to take a position with the Federal Reserve.

Walsh will take over a $68 billion pension fund, eight times larger than the $8.5 billion Indiana State Teachers Retirement Fund he headed since 2008. New Jersey’s Investment Division manages money for seven pension funds that provide benefits to about 800,000 working and retired teachers, police officers and government employees.

“New Jersey has attracted an investment professional with a deep and diverse background in capital markets and portfolio management,” Eristoff said in a news release. “Timothy Walsh has a superb record of success in managing assets in challenging and volatile economic conditions.”

Before joining the Indiana fund, Walsh was a senior trader in fixed-income securities and foreign currencies for Bank of Montreal, Nationsbank, Continental Bank and Bank of Boston, and ran his own investment advisory firm, according to the Treasury announcement.

During the fiscal year that ended June 30, 2009, the Indiana Teacher’s fund lost 16.3 percent, according to the system’s latest actuarial report. New Jersey’s system lost 14.2 percent over that period, according to the state Treasury. The median public pension return fell 17 percent, according to Wilshire Associates of Santa Monica, Calif.

Through June 30, 2009, New Jersey’s pension system was underfunded by $46 billion, meaning the assets on hand were worth less than half the projected cost of the benefits promised to members, actuary reports show.

Walsh is the second major public-pension leader to leave the state in the past month. Shawn Wischmeier, the chief investment officer for the Indiana Public Employees Retirement Fund, or PERF, was hired as chief investment officer of North Carolina's retirement systems in early June. PERF is Indiana’s biggest pension fund, responsible for paying benefits to 220,000 police, firefighters and government employees.

State lawmakers voted this year to require the boards of PERF and the Indiana State Teachers Retirement Fund to appoint a single director for both funds. TRF, with $8.1 billion in assets, handles benefits for 160,000 Hoosier educators.

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