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Exclusive Q&A: Chrissie Chen Pariso, Senior Private Equity Portfolio Manager At Exelon

by trusted insight posted 5years ago 7779 views

Chrissie Chen Pariso is a senior portfolio manager focused on private equity at Exelon. Previously Pariso worked at Dell Financial Services, Sterling Capital Partners, and GE Capital. Pariso holds a MBA from the University of Chicago Booth School of Business and a bachelor's degree from Georgetown University.

Chrissie Chen Pariso was recently named on Trusted Insight’s ranked list of Top 30 Corporate Limited Partners. She graciously spoke with Trusted Insight on March 14. The following interview has been edited and condensed for clarity.

Trusted Insight: You have a fairly broad career background. What led you to becoming a private portfolio manager at Exelon?

Chrissie Chen Pariso: Early on I did investment banking, and then from there, I decided to go corporate and work at Dell Financial Services. I helped build up their treasury department, particularly their securitization capabilities. You always hear about the progression from banking to private equity. I knew I wanted to get to private equity after my time working at Dell, and I knew the best way to get there was going through business school, so that was the next logical step.

I attended the University of Chicago Booth School of Business for my MBA. Booth has a great program, the Private Equity Lab, which gives students working experience at a private equity firm. During the quarter, you intern at a local private equity shop and take a class based on that. I interned with Sterling Capital Partners, a mid-market buyout shop in Chicago, during my first year and then became a summer intern. Then, at the end of my summer internship, the firm’s founder gave me an offer to join full time. So I ended up working full time and getting my MBA during my second year of business school. I was at Sterling from Mondays to Thursdays and then took business school classes on Fridays and Saturdays. It was a tough year, but it was great. I joined Sterling after graduating. I really enjoyed it on the investing side. However, after I became pregnant with my first child, I decided to stay at home and raise my first son. I knew I would have a long career ahead of me and thought it would be fine to take some time off. You only have your first child once. And being a stay-at-home mom is definitely the most demanding job that I’ve ever had!

After about eighteen months at home, I decided to return to work. I knew I didn't want to go back to the GP-side, but I still wanted to stay involved within private equity. I was exploring LP and investment consulting roles, but there weren't any opportunities in those areas when I was looking. So instead, I found a role at GE Capital in the commercial distribution finance group. This was an analytical role involving modeling out their loss reserves for their receivables. There were a couple reasons why I took this job. First, I knew that GE was a great brand to have on my resume. Secondly, I took that role was because I was also pregnant with twins at the time, which was unexpected, and I needed to find something that did not require me to travel that much. The role at GE was perfect for me during the time in my life where I was expecting to have twins. They were very supportive; they hired me when I was 7 months pregnant, which was amazing. GE was great in terms of the family-work life balance.

The last reason is that GE has a great rotational program. My career goal at GE was to work in commercial distribution for a couple of years, and then rotate into an investing-focused role. However, after nine months at GE, someone told me there was an LP position open at Exelon with a focus on private equity. I wasn’t looking for another role at that time, but it was just a really exciting and interesting role to work with a smart and talented team and have the opportunity to build the private equity portfolio from the ground up. So that’s how I ended up moving from the GP side to the LP side. I always joke that I started on the dark side, and now I’m on the LP side, which I believe is a lot more fun.

Trusted Insight: You mentioned that you knew you wanted to be in private equity when you were working in investment banking. Is there anything in particular that attracted you to private equity?

Chrissie Chen Pariso: I think it was just because that's what everyone expects you to do! If you do investment banking, then private equity is just the next logical step in your career. No one really knows what they want to do when they’re in their early 20s, but I knew I liked the finance aspect. On the banking side, you're doing more advisory stuff, whereas with private equity you're actually investing, helping companies grow, exiting and so forth. You see it play out all the way through, and that's what I thought made private equity more interesting.

Trusted Insight: How has your previous career experience helped you in your role at Exelon?

Chrissie Chen Pariso: Being at a GP previously has helped tremendously, because I know what goes on behind the scenes at a private equity firm. Having that insight is very helpful on the LP side, and that was probably one of the reasons why I was hired by Exelon. Our Chief Investment Officer, Doug Brown, was previously CIO at Chrysler and was hired by Exelon in 2010. Doug has built up the investment team to what it is today, and was very thoughtful about how he structured the team in terms of finding people with diverse backgrounds, experiences and different perspectives. I think that overall approach has made us very effective as an investment office.

Trusted Insight: Can you tell me a bit more about the team at Exelon, in terms of how that's structured and the team dynamic?

Chrissie Chen Pariso: In the Exelon Investment Office, we have Doug Brown as our CIO. The public markets team, includes the head of public markets, two people focused on hedge funds and equities, and one person focused on fixed income. On the private market side, we have a head of private markets. Beneath that, I focus on private equity, Drew Ierardi focuses on real estate and real assets, and Raja Vannela is an analyst who focuses on everything. In addition to the public and private markets teams, we also have an operations team that's comprised of three people.

Trusted Insight: Is there anything about the team that makes it special in terms of culture?

Chrissie Chen Pariso: Within our team, we have a lot of diversity in terms of ethnicity, gender and background. The strong focus on diversity and inclusion is something that's very central to Exelon at all levels, starting from the top of our organization at the Board. It is part of how Exelon hires, how we finance the company, how we chose our vendors, and how we invest. We really do believe that having diversity of thought around the table generates better investment outcomes. Everyone is open in terms sharing their opinions, and our team discussions are always very interesting because of the different viewpoints. I think having that culture and diversity makes us a better investment office.

Trusted Insight: Tell me about your strategy for manaing the private equity portfolio. How do you make investment decisions?

Chrissie Chen Pariso: Historically, we were only invested in Fund-of-Funds. We’ve actually only been investing directly into funds since 2010, so we had a fresh slate and were able to build the direct private equity portfolio from scratch. We've invested all the way from venture to mega buyouts in the US, internationally and emerging markets. I focus on all of the strategies under private equity.  Our investment process consists of having an initial meeting or call with myself. If there is interest, we will have follow up meetings and an onsite due diligence visit. In addition, all managers will have to meet with our CIO. We then have a MAP (manager approval process) with the investment team for final approval, where the CIO, Head of Private Markets, Head of Public Markets, and Managing Director of Operations vote on the manager. Our MAPs are scheduled about every two weeks.  

Trusted Insight: What investment themes are of interest to you right now?

Chrissie Chen Pariso: There's a lot of competition right now across all fund sizes from the amount of capital that's being raised. However, I do think there's a greater opportunity to generate alpha on strategies focused on small to lower mid-market companies.  

I think the market's going to be volatile, so distress is interesting. I think emerging markets is interesting right now, although there's a lot of uncertainty around that, especially given the currency risk. When you look at the overall growth of emerging markets, it is higher than the developed markets, but it's being able to find the right managers to really play on the emerging market strategy.

Trusted Insight: You mentioned currency risk and general uncertainty in the markets. How concerned are you with these factors given the long-term nature of private equity deals?

Chrissie Chen Pariso: Private equity is such a long-term strategy. The issues that we’re currently facing when investing in a fund now are probably going to be different when we exit the investment five to eight years from now. You need a long-term perspective, especially when you're looking at the emerging markets. We do recognize the risk, and I don't think you should overweight this year, but you also have to be consistent and make sure you diversify your investments across the vintage years.

Trusted Insight: How does your allocation fit into the overall portfolios, in terms of team collaboration and strategy?

Chrissie Chen Pariso: We do look across our team strategies in terms of where our exposure lies by country, particularly within the emerging markets. Drew Ierardi is focused on our emerging market strategy across the different asset classes. We will do a review to share ideas and to get a better understanding of where we may be under/overweight in certain countries. When we do our international trips, we try to have meetings across asset classes so that we can get a broader perspective. So if I'm going to Asia, I'm not only going to meet with private equity managers, but I'll also meet with real estate and hedge funds managers to get a sense of what is going on in that region from different perspectives. That way, we can try to hear what are the public markets doing. How are they thinking about investing in this region? What are the real estate managers seeing? As opposed to just the private equity managers who could have a completely different take on it. All viewpoints are equally important.

Trusted Insight: What are the key characteristics that you look for in a manager, and how do you build those relationships?

Chrissie Chen Pariso: There are probably about 2,000 funds that are fundraising right now. We may invest with five to seven managers a year on the pension, including re-ups. When you think about that as a percentage of 2,000, that is not a high hit rate. The ones we want to invest in have a proven track record, great team, interesting strategy, are intellectually curious, honest with themselves, are trustworthy and don't have an ego. And we know there are a lot of egos in private equity! This is a partnership and we're looking at it as a long-term relationship.

Trusted Insight: What sets Exelon apart from its peer organizations?

Chrissie Chen Pariso: Doug Brown, CIO, was very strategic when he developed the governance structure at Exelon. We’re much more like an endowment as opposed to a corporate pension. We report to an Investment Committee that approves investment strategy, allocations and investment limits. However, the managers’ selection process lies within the investment office under a certain dollar amount; so in those cases it doesn't need to get approval from the investment committee. As a result, we are able to operate with a lot of flexibility and can move quickly if we need to. I think that really sets us apart from our peers.

Trusted Insight: What's the number one lesson that you've learned in your career thus far that you would like to pass on to the next generation of institutional investors?

Chrissie Chen Pariso: Life is too short. Find a job that you really care about and with people that you can learn from. Just as important: don’t let your career determine when/if you have children. I have four kids under 6, and it is crazy; but it is amazing. The timing wasn’t perfect, but I wouldn’t change anything about it.

Trusted Insight: Apart from finding a job that makes you happy, what is the one thing that really gets you out of bed in the morning?

Chrissie Chen Pariso: This past year, one of my missions has been to advance the discussion around diversity and family leave policies – they are absolutely terrible within private equity. I ask all my GPs about diversity, not only in terms of ethnicity, but gender as well. Often GPs tell me that it's really hard to find women to hire and that few women apply for private equity investing roles. Some have even said that women don’t apply for their roles because of the travel and long hours. Not a good answer, especially since you see women in the IR roles, which require just as much travel and time. You also see more women in management consulting roles, which probably require long hours and even more travel. The short answer is that we need to do a better job to attract and retain women in private equity.   

The other area I am focused is family leave policy. When I ask about it, the most frequent answer I get from GPs is, "we don't have one." In order for you to build a diverse and inclusive environment, you have to start thinking about a family leave early on. Ideally, it needs to be a family leave policy, not just a maternity policy because we shouldn’t put the burden of raising a family solely on women. You have to make it equal across genders. If women see men also taking family leave, that balances out the gender disparity in the workplace, and I think we would get more women into private equity and keep women in the industry. At a minimum, family leave should be 12 weeks fully paid, no impact on carry, vesting or bonus. Tech companies have generous family leave policies and their retention rates for women are much higher. If Mark Zuckerberg can take family leave and Facebook can still survive, then I think it’s fair to say that anyone else should be able to take time off to raise their family. I push all our GPs to have a response on what their family leave policy is. Being in a position to help drive that mission is something I'm very passionate about, and hopefully we'll move the needle.

Learn more about the Top 30 Corporate Limited Partners here.