Access here alternative investment news about Exclusive Q&A: DeAnne Mannion, Lead Portfolio Manager, Ohio Public Employees Retirement System

DeAnne Mannion is the lead portfolio manager at Ohio Public Employees Retirement System, or OPERS, where she oversees $40 billion worth of assets, including hedge funds, non-U.S. and U.S. equity, emerging market debt, U.S. and global high yield.

Prior to this, she held various roles at Huntington National Bank, including portfolio manager and senior treasury analyst. Mannion has an MBA in finance and management science and a B.A., both from The Ohio State University. She is also an Ironman triathlete and a member of United Way Women's Leadership Club.

Ms. Mannion was recently named on Trusted Insight’s ranked list of Women Rising Stars In Institutional Investing. She graciously spoke with the Trusted Insight on August 17, 2016. The following interview has been edited for clarity.

Trusted Insight: Prior to starting at OPERS you were a portfolio manager for Huntington National Bank. What transferable skills did you take from your banking background to pension investing? 

DeAnne Mannion: I helped manage debt issuance and fixed income investments while working in the Huntington’s Treasury Group. I had also been a credit analyst at that Bank, working on commercial credits.  All of these jobs gave me a number of transferable skills. At OPERS, I switched from doing debt to doing non-U.S. equity investments. I always loved financial markets, but working at OPERS and doing equities was a brand new opportunity for me.

Trusted Insight: And how did that opportunity arise?

DeAnne Mannion: In early 2000, there was a change in executive director at OPERS. Laurie Hacking was hired for the position and she sought to bring in talent from different backgrounds.   I was encouraged to apply at OPERS by a friend who knew about Ms. Hacking’s changes. I joined OPERS in June 2001.

Trusted Insight: What is your experience as a woman within institutional investing? 

DeAnne Mannion:  Overall, my experience has been positive.  During my career I have been mentored and given good opportunities. Personally, I wish there were more women in the industry. I think it is a perfect field for women because the results are very clear. You can see your performance versus a benchmark and the value you add. I wish there were more women going into asset management and institutional investing. It is important for the industry to have more biological diversity. In fact, there has been some interesting research recently on how more diverse teams make better decisions and mitigate groupthink.    

Trusted Insight: How do you think that institutional investing could be promoted more as a career choice for women?

DeAnne Mannion: At OPERS we wonder about that issue as well. OPER’ is based in Columbus and a few miles away from The Ohio State University, which graduates many women with degrees that fit our field. I believe talking to young women—by doing active outreach—about asset management early in their careers is very important.

The expansion in longevity is a real success story for our species, but many pension systems were not constructed to have such a high ratio of retirees to active members. These are great challenges for pension boards and investment staff.

Trusted Insight: In the 15 years that you've spent at OPERS, how have you progressed within your role? What things have changed? 

DeAnne Mannion: A lot has changed. I started as an analyst and worked my way up to a lead portfolio manager over the course of 15 years. I've served four chief investment officers and experienced many market cycles. Starting in 2010, my responsibilities grew beyond non-U.S. equity to overseeing all of our external public market managers. My role at OPERS is to manage a team and source external investment talent from all over the world in a variety of asset classes.  We buy strategies and then construct portfolios around our risk return objectives. What has changed the most is that we now have more experience and more powerful analytics to help us with our work.

Trusted Insight: OPERS has a huge pool of capital. How does that impact on the size of your team and the number of your managers?

DeAnne Mannion: We have an investment team of around 50 people and manage some fixed income and U.S. equity strategies in house. The rest of our capital is outsourced across a variety of diverse asset classes. Given OPERS size, we do need to use many investment managers and have people overseeing those managers and allocations.

Trusted Insight: As a pension fund, you have a lot of people relying on you for a secure retirement, which you have to sustain over the long term. What kind of trends do you see developing within pensions to account for this? 

DeAnne Mannion: Globally, pension plans are facing the same challenges: low returns and higher than expected longevity. The low returns are a direct result of developed central bank actions to stimulate growth after the global financial crisis. However, longevity is a long-term trend and one of the most exceptional things that has happened.  The expansion in longevity is a real success story for our species, but many pension systems were not constructed to have such a high ratio of retirees to active members.  These are great challenges for pension boards and investment staff.  Some pension plans have sought to change their liability structure, but most have sought to earn higher returns by allocating more capital to alternative investments such as private equity.   

Trusted Insight: In terms of your long-term portfolio strategy, how are you attempting to mitigate those issues? 

DeAnne Mannion: In 2012, we made some changes to our pension liabilities. We categorized our members into different buckets based on age and service. Three classes were created:  A, B, and C. A class is our current retirees; B class is our longest working active members, and C class represents everyone else. The retirement age and service requirements were raised for our C class members.  We also recently stopped offering an OPERS health care plan for our retirees and moved them to a connector/exchange with OPERS providing a monthly stipend.

Trusted Insight: Is there any area outside of the U.S. that you think is particularly interesting right now in terms of investment?

DeAnne Mannion: I think one area that's struggled over the last five-and-a-half years has been emerging markets. It is an area OPERS currently has an overweight to in both our debt and equity portfolios. 

Trusted Insight: How do you feel the markets are being affected right now by the political instability that we're seeing from Brexit and the U.S. election cycle?

DeAnne Mannion: There are always political elections happening around the world. But as you get closer to an election, the uncertainty typically lessens. Post-Brexit the markets performed really well. Some people lost money, but the markets functioned without issue and those who did not sell because of the volatility have been rewarded.  We didn't expect that referendum result, but we also did not fundamentally change our positioning; and a lot of our names rallied back in the days after the event. 

Being a long-term investor is tough because it requires a lot of discipline, patience and having the fortitude to rebalance away from things that have been working well.

One of our competitive advantages is to be a long-term investor in an environment that seems to be increasingly short-term. Being a long-term investor is tough because it requires a lot of discipline, patience and having the fortitude to rebalance away from things that have been working well. Another of our most competitive advantages is our size. We can negotiate attractive fees for our members.  Paying attention to fees is very important. Finally, we can diversify broadly for the members of our pension plan. I think those are three really important competitive advantages OPERS possesses.

Trusted Insight: Outside of investing, you have also competed as an Ironman triathlete. Can you tell me a bit about that and how it has that given you an edge in your career?

DeAnne Mannion: I started triathlon in 2006 and over the years I just kept doing longer and longer distances. In November of 2012, I did Ironman Arizona. I think endurance training teaches you a lot about the importance of consistency and hard work. You learn perseverance.  There are a lot of analogies between ironman and being a successful long term investor. You can't get too discouraged. You will have moments when you are not doing well and want to quit. But you have to hold steady, rein in your emotions and keep yourself focused on the long term.

To learn more about women in institutional investing, view the full list of Top 30 Women Rising Stars In Institutional Investing.