How have you been a change agent at
your organization? What have you done
that you’re particularly proud of?
I’m particularly proud of the progress that’s
been made on the Real Assets portfolio. Over
the last 1. 5 years, I’ve focused my efforts on
transforming a highly concentrated and significantly under-allocated portfolio into a
well-balanced portfolio that’s aligned with its
long-term objectives. To date, and with the
help of the entire PERA team, I’ve implemented full mandate restructures, incorporated new mandates, completed several RFPs,
and have increased capital deployment across
the portfolio by approximately $1B in assets.
What is the asset class or investment
that keeps you up at night, and why?
Consistent with our strategic asset allocation
and the importance of its role, I don’t believe
I can speak to one specific asset class. We
manage highly liquid strategies right alongside long-term illiquid strategies, and balance
those risks accordingly. I admit it’s harder to
stomach the volatility in some of the liquid
Real Assets strategies, but in those instances,
we focus on risk management, market fundamentals, and manager accountability.
What methodologies have you adopted
within your institution?
Implementing an analytical framework and
a formal portfolio construction process to the
Real Asset portfolio.
Where do you fall in the passive vs.
I support passive investment opportunities
in the most efficient markets, where alpha
has historically been less attainable. My
belief is that the primary consideration for
a long-term portfolio is less about implemen-
tation-level decisions and more about asset
allocation and prudent diversification.
What are the changes you’d like to see
the institutional investing community
make in 10 years?
Stronger alignment bet ween investors and the
managers we partner with. The amount of
institutional capital in the market compared
to the terms and conditions that are at times
agreed upon are quite unbalanced. PERA
requires fiduciary alignment, favorable fund
terms, full transparency, and strong corporate governance from our partners.
Who is a manager you don’t currently
work with whose brain you’d like to pick?
Recognizing that my choice is not manager-specific but more focused on a leader within
the industry: John C. Bogle. I’m fascinated by
his accomplishments, and admire his success
in providing efficient and affordable investment solutions to all investors.
Ideally, where would that meeting take
I’d hope Mr. Bogle enjoyed craft brew,
because we’d meet at my favorite local brewery, Santa Fe Brewing Company!
What is the software investment tool
that helps you most?
I spend a lot of time researching managers
and running analytics through our consul-tant-provided information databases. Also,
our cash flow analytic software is helpful
Kristin E. Varela
Senior Portfolio Manager, Real Assets, Public
Employees Retirement Association of New Mexico
(Santa Fe, NM)
She helped flawlessly reconcile the 10,000+ securities,
150+ accounts, and 70+ countries.
when underwriting illiquid opportunities.
What would improve the relationship
between you and managers?
Meetings and communications that aren’t
centered on the current fundraise. The most
productive and informative interactions are
when a manager isn’t in the market for their
next opportunity. Also, more emails providing meaningful content and fewer cold calls.
Why did you choose your current path?
My mentors have recognized potential and
guided me toward professional milestones.
I’m most passionate about this path because
it’s an opportunity to apply my efforts in a
meaningful way. This fund isn’t simply a
pool of institutional capital, it serves over
100,000 participants across the state, some
of which I know and relate to personally.