Episode summary
West Virginia CIO Craig Slaughter: Four decades, $4.8 billion in outperformance and one rule
Summary
Craig Slaughter says the West Virginia Investment Management Board’s edge has come from discipline, diversification, and protecting the fund from politics. He points to a 25-year 8.1% return for the pension plans, which he says has added $4.8 billion versus the median public fund, but he is most proud that the organization has preserved its fiduciary integrity and avoided being whipsawed by political pressure.
His investment style is shaped by history. Slaughter argues that market panics usually rhyme with past episodes, which is why the board held its strategic asset allocation through the dot-com bust, the global financial crisis, and the pandemic. He says that consistency has made it easier to communicate with trustees now, because the organization has already proven it can endure bad markets without abandoning its process.
Slaughter is worried about the U.S. budget deficit and about the rise of the far left and far right, which he views as economically hostile because both seek top-down control. On China, he says West Virginia’s divestment from state-owned entities was narrow and mostly symbolic, done to preempt broader political restrictions. Looking ahead, he favors international stocks over U.S. exposure and says hedge funds remain well suited to a noisy, volatile environment.
Key takeaways
- Slaughter says West Virginia’s pension plans returned 8.1% over 25 years, which he says created $4.8 billion of value versus the median public fund.
- He argues the fund’s biggest success was preserving fiduciary independence and avoiding being “whipsawed by politics.”
- Slaughter says the board held its strategic asset allocation through the dot-com bust, the global financial crisis, and the pandemic.
- He says the U.S. budget deficit is a major long-term risk, and he sees the far left and far right as economically harmful because both favor top-down control.
- Slaughter says the China divestment was limited to state-owned entities and had a diminutive portfolio impact.
- He says hedge funds fit the current environment better because they are more nimble in periods of chaos and uncertainty.
Notable quotes
“we've avoided you know being uh you know whipssawed by politics”
“we have a 8.1% 8.1% return in the pension plans, which make up about 25 billion dollars”
“that has generated a lot of uh goodwill uh for us as an organization and thus it's it's easier”
“the worst thing you can do is in the middle of a market event is is is act almost”
“I'm really worried about our our, you know, the the US's budget deficit and the inability to to tackle it”
How the episode opens
Welcome to another episode of the Allocators Playbook. I'm Lauren Bailey, deputy editor at Markets Group. My guest today is Craig Slaughter, executive director, chief executive officer, and chief investment officer of the West Virginia Investment Management Board.
there. He oversees more than 28 billion on behalf of the state's defined benefit pension plans, workers compensation funds, and other public assets. Craig has spent nearly four decades with the organization and has helped guide the portfolio through some of the most challenging market environments in modern history.
Throughout that time, he's remained committed to a simple philosophy. Stay disciplined, stay diversified, and don't let short-term noise derail long-term investment decisions. Today we're going to talk about the culture he's built at the West Virginia in Investment Management Board.
Why he believes strong governance is one of the greatest competitive advantages and institutional investor can have. The important role every employee from the investment team to operations plays in delivering long-term outcomes, and where he's directing his attention as today's economic and market landscape continues to evolve. Craig, it's great to have you with us.
So, you've spent nearly four decades, as I just said, helping shape one of the country's most respected public investment organizations. What would you say when you look back you're most proud of?
Well, many things frankly, but you know, number one is is I mean, you can put it in in a term of numbers. I mean, our we you know, quite just generally our success. You know, we have a over the last 25 years, we have a 8.1% 8.1% return in the pension plans, which make up about 25 billion dollars of the the total.
And uh and you know that you know that's well above the median. So you know you know comparatively we feel like we've done well.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- public pension governance
- investor psychology
- historical market perspective
- divestment from china
- institutional investing mistakes
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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