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Exclusive Q&A: Bill Camelio, Investment Strategist, Yale-New Haven Health System

by trusted insight posted 5years ago 2932 views

Bill Camelio has served as investment strategist at Yale-New Haven Health System since December 2014. Previously, he was a senior associate at Segal Rogerscasey, an investment consulting firm, and an investment specialist at Prudential Financial, among other positions. Camelio holds a B.A. in finance from Merrimack College and an MBA in finance from Northeastern University.

Camelio and two of his colleagues manage Yale-New Haven Health System’s $2 billion investment assets. In this interview, he discusses the hospital’s asset allocation strategy, working on a small team and the unique challenge facing hospital investors.

Mr. Camelio was recently named on Trusted Insight’s Top 30 Hospital Investment Office Rising Stars. He graciously spoke with us on September 22. The following interview has been edited for clarity.

Trusted Insight: Prior to Yale-New Haven Health System, you worked for a number of years at an investment consulting firm. What attracted you to a hospital investment office?

Bill Camelio: When I was in investment consulting, I had worked with a number of hospital plans as well as corporate pension and defined contribution plans. Investment consulting provided me with a great foundation of investment knowledge but my ultimate goal was to move to the plan sponsor side, and if possible, work closer to home. Yale-New Haven Health was the perfect opportunity. In addition, the System does a lot for the surrounding community. At the end of the day, if we are able to provide solid returns or save money on fees, we can help someone get treatment that they otherwise may not be able to afford.

Trusted Insight: From an investment perspective, how is managing clients' money different than being on the other side of the business?

Bill Camelio: Because we are focused on only the system’s portfolios, we are able to dig a little deeper than if we were responsible for multiple client portfolios. We certainly don’t have the same resources that investment consulting firms have, so it’s important to stay current on trends. This may have been easier working for an investment consulting firm which has interactions with plan sponsors located across the United States. And certainly the relationship we have with the investment committee and our organization’s leadership is deeper since we interact with them more frequently. 

Trusted Insight: Tell me about your governance and investment process.

Bill Camelio: From a governance perspective, we review the investment policies and asset allocation annually, stay within our asset allocation ranges as well as stay on top of the regulatory environment amongst other day to day oversight activities. While we do not currently have an ESG initiative, it is something we consider.

The investment process is an iterative process between the investment staff, investment committee and our consultant. Ideas can be generated from any of those sources. Once an initiative has been set, it’s the investments staff’s responsibility to fully vet the opportunity and find the appropriate partners to help us execute. We will attend industry specific forums and education sessions to help ensure we know the current market environment. We will meet with a number of firms to understand their process and philosophy, including multiple meetings with portfolio managers and analysts. Before we bring anything to our investment committee, all members of the investment staff have to be on board.

Trusted Insight: A few weeks ago I interviewed your colleague Geeta Kapadia. I learned that that you are a relatively small team with a generalist structure. What is your work dynamics like in day-to-day operation?  

Bill Camelio: I think Geeta summed it up pretty well when she stated we are generalists. I have been here since 2014 and we have worked on a variety of projects. We have explored investing in unconstrained fixed income, we moved from hedge fund of funds into direct hedge fund relationships, and recently made changes on our developed international equity portfolio. We have attacked all of these initiatives as a team.

While we make decisions as a team, we also have broken down our responsibilities from an asset class perspective. I am primarily responsible for the absolute return and global fixed income portfolios which entails staying on top of our current relationships as well as creating a bench for potential investment in the future. This does not mean my colleagues are not involved in the process or that I do not get involved in other areas of the portfolio. Because we are a small team, it’s usually all hands on deck when it comes to making changes.

Trusted Insight: In light of the recent discussion around hedge funds, many institutional investors, such as pension funds and endowments, are planning to reduce their allocations. Are you part of this trend?

Bill Camelio: Actually, quite the opposite, we have recently increased our exposure and moved from hedge fund of funds into direct hedge funds allowing us to eliminate the additional layer of fees. We like that our hedge fund managers have the ability to find the best opportunity and exploit it, whether that is going long or short,  investing in the United States or internationally, or within debt or equity. From a qualitative standpoint, we find that flexibility quite appealing.

Trusted Insight: How much do you invest in hedge funds and how does it compare to your peers?

Bill Camelio: We have north of 15% which is probably more than most of our peers while our fixed income exposure is generally lower. We utilize our hedge fund portfolio to provide additional sources of return to help meet our return target, but also provide some level of downside protection. Our fixed income portfolio is mostly utilized for preservation of capital.

These decisions we make can have a real impact on the strength of the organization and help our healthcare professionals make a difference in people’s lives

Trusted Insight: What challenges do you think hospital investors face in today's market?

Bill Camelio: I think there are two things that make today’s market complex for hospital investors. One is that the demand for hospital services is difficult to forecast. It can be difficult to predict how many people are going to get sick or injured. From an investment standpoint, it can be difficult to know what the appropriate level of risk should be and how much liquidity is required based on these uncertainties. We are very fortunate to have an excellent cash management team that helps guide us through these issues.

The other issue is the regulatory environment. As you know, healthcare costs are increasing on an annual basis and Medicaid reimbursements are getting lower and lower every year. Getting paid less than cost for our services certainly puts additional pressure on meeting our return objectives.


Trusted Insight: What's one thing you like about working in a hospital investment office?

Bill Camelio: There are many things I like about working in a hospital investment office. The investment office at a hospital is not part of the core competency of the organization. The hospital employs approximately 20,000 individuals with most focused on healthcare with only a few of us focused on investments. One good thing that comes from that is it provides a level of autonomy for our team. We get a lot of autonomy to make investments decisions and because it’s such small team, I really feel like all of our voices are heard. In addition, these decisions we make can have a real impact on the strength of the organization and help our healthcare professionals make a difference in people’s lives.

To learn more about hospital investing, view the complete list of Top 30 Hospital Investment Office Rising Stars.