Jagdeep Singh Bachher joined the University of California as Chief Investment Officer of the Regents on April 1, 2014. He is responsible for managing the UC pension, endowment, short-term and total-return investment pools. Before joining UC, Bachher was deputy chief investment officer and chief operating officer for Alberta Investment Management Corp. (AIMCo), one of Canada’s largest investment fund managers. He has been a champion for change in the investment business and gained an international reputation as an innovator.

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Born and raised in Africa (Nigeria), Bachher moved to Waterloo, Ontario (Canada), to study engineering at the University of Waterloo. In addition to a B.S. in mechanical engineering, he earned an M.S. and Ph.D. in management sciences, also at University of Waterloo.

What are the challenges and opportunities regarding investing UCRP funds, in particular?

Our UCRP funds are invested 55 percent in publicly traded stocks, 22 percent in bonds and 23 percent in alternatives, that is real estate, hedge funds and private equities. In the past five years, stocks are up almost 200 percent. That can’t last forever, so it’s likely their returns will be lower in the future. We need to make sure our asset allocation is prepared for a lower return environment, while at the same time remembering that lower returns also present opportunities. We’ve increased our cash in order to have the flexibility to take advantage of opportunities.

Last fall the Regents approved UC Ventures, an independent venture capital fund. What do you see as potential benefits from UC Ventures?

UC Ventures aims to pursue investments in UC research-fueled enterprises. Our goal is to capture the economic value UC is creating through its pioneering research while carefully managing potential risk exposures. Let’s invest where we have a competitive advantage.

The Regents approved UC Ventures last September, but it won’t be up and running until mid-2015. We’re currently developing the business plan, which we’ll share with all stakeholders before a dollar is invested.

For the past several years, there have been questions about the CIO’s use of external managers to manage UC’s investments. What is your thinking about external managers?

We actively use external managers for equities and alternatives and even in a few cases for fixed income. I think we’ve been more diversified than we need to be. When I joined on April 1, 2014, we had around 70 external managers in our public equities portfolio. This amounts to holding around 5,000 individual stocks. You end up getting exposure to the passive indexes at the costs of active management. So it’s time to simplify. We need to evaluate whether our assumptions are still working. As we’ve done this in the past few months, our goal is to maximize return per unit of risk and manage costs. As a result, we’ve reduced the number of external managers from 70 to about 40 in public equities, as an example.

CalPERS recently said it would no longer invest in hedge funds. What is UC’s position?

Hedge funds should deliver superior risk-adjusted returns that add diversification to the portfolio, making them an appropriate strategy for investors, like UC, that invest for the long-term. Our hedge funds produced a 14.3 percent gain in the year ended June 30, 2014, well above our benchmark.

When you’re not managing investments, what do you do with your time?

I have two young children, 1 l/2 and 7, so I mostly hang out and play with them, and just generally try to be a good dad. I just went to Disneyland for the first time.

I’ve been visiting all the campuses. I call it “back-to-school days”. That has been a lot of fun. I’ve been meeting with faculty and staff and learning about what is going on across the UC. I think our world-class faculty is a competitive advantage for us. As an investor, learning from experts teaches us where the opportunities might lie ahead of us.

I also like to read. I think reading is important because I need time to think.

During the day, I also enjoy playing Ping-Pong with my team.

What motivates you?

I am passionate about investing. And investing for the University is a great way to make a difference and help retirees, students and UC.

Anne Wolf is a content strategist in Internal Communications at the Office of the President.