Joseph Dear, who as chief investment officer of the California Public Employees’ Retirement System rebuilt the biggest U.S. public pension after a $96 billion loss, died yesterday in Sacramento. He was 62.
The cause was prostate cancer, the fund said in a statement. His illness was disclosed in June, when he handed some day-to-day investment responsibilities for the $283.9 billion fund to his second-in-command, Theodore Eliopoulos. Eliopoulos will continue as acting chief investment officer pending a search for a new CIO, according to the statement.
Dear took over Calpers’ investments in March 2009, about two months after its assets plunged to $164.7 billion in the global financial crisis, from a peak of $260.6 billion in October 2007. His timing was fortuitous, as the Standard & Poor’s 500 Index bottomed on March 9, 2009. Under Dear, assets returned to their pre-recession level in May.
“You need to be extra careful not to make changes just because you’re under pressure,” he said after his appointment was announced, according to the Sacramento Bee newspaper.
He focused investments on private equity, emerging markets, hedge funds and public works projects to meet the fund’s targets for annual rate of return, now at 7.5 percent. He pushed private equity companies to lower fees and installed conflict-of-interest controls after an influence-peddling scandal rocked the fund in 2008 and 2009.
“We’re not going to succeed or fail on short-term tactical moves,” he said in an interview on Bloomberg Television in June 2009. “We’re a long-horizon investor, and we have confidence that we see cycles in the investment markets. But we know if we stick with our plan, we’re going to be come out OK.”
Under Dear, the Sacramento-based fund returned 16.2 percent in 2013, the biggest gain in 11 years. The fund gained 25.6 percent on its publicly traded equity holdings, trailing the S&P 500 (SPX), which rose 29.6 percent in 2013, according to data compiled by Bloomberg.
Dear was the executive director of the Washington State Investment Board prior to his work at Calpers. In that role he oversaw a pension fund with $84.8 billion under management as of June 2008, according to an article in Private Equity International magazine, which cited “his well-documented embrace of alternative assets.”
From 1993 to 1997, he led the Occupational Safety and Health Administration as an assistant secretary of the U.S. Labor Department. In nominating Dear, President Bill Clinton cited his previous experience running a workplace-safety agency in Washington State.
Joseph Albert Dear was born on June 7, 1951, in Washington, D.C., and graduated from Evergreen State College in Olympia, Washington, with a degree in political economy.
He worked for Frank Russell Co., an investment firm based in Tacoma, Washington, and managed a compensation insurance fund as director of the Washington State Department of Labor and Industries. He also was research director for the Washington State Labor Council (AFL-CIO).
Following his time at OSHA, he was chief of staff to then-Governor Gary Locke of Washington.
Dear’s wife, Anne Sheehan, is director of corporate governance for the second-biggest public pension, the California State Teachers’ Retirement System.
He had two children, Annie and Ben, with his first wife, Leslie Owen.