Dominic Garcia, CIO of New Mexico PERA, reflects on his nearly ten-year tenure working under David Villa at the State of Wisconsin Investment Board (SWIB).
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“First of all, I think SWIB is a best-in-class public pension on a number of fronts here in the United States, and I think even globally.”
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More from Dominic Garcia
PredictionNot checkable as stated
Garcia: Bitcoin will drop to its underlying tech value without government backing
“If governments are not going to embrace it honestly, it should go down to just the technology value of it.”
Dominic GarciaApr 5, 2021▶ 49:21Dominic Garcia – Risk-based Investing at New Mexico PERA (Capital Allocators, EP.187)
PredictionPartly held up
Garcia: PERA targets 7.25% return using 10% beta leverage and 1% alpha
“What we're looking at is in our beta book, we're looking to incorporate embedded leverage in the asset classes and then about in a very modest amount, which is about 10% at the total asset allocation level. So we think we can get somewhere around a six percent…”
Dominic GarciaApr 5, 2021▶ 22:56Dominic Garcia – Risk-based Investing at New Mexico PERA (Capital Allocators, EP.187)
Insight
Garcia: Private equity should be evaluated for PME spread, not headline IRR
“The reason why you buy private equity isn't for the total return, in my view, it's the relative return to your PME, because a private equity portfolio or private equity management, let me just give you an example. Let's say they generate a 12% IR. Well, if you…”
Dominic GarciaApr 5, 2021▶ 44:36Dominic Garcia – Risk-based Investing at New Mexico PERA (Capital Allocators, EP.187)
Insight
Garcia: Private assets are active management vehicles, not distinct asset classes
“We view private assets as not asset classes. We view the private assets as another way to access active management or alpha.”
Dominic GarciaApr 5, 2021▶ 26:31Dominic Garcia – Risk-based Investing at New Mexico PERA (Capital Allocators, EP.187)
Opinion
Garcia: Hedge funds are pound-for-pound the best risk-adjusted alpha generators
“We're buying market neutral hedge funds because on a risk adjusted basis, hedge funds are still pound for pound the best alpha generators.”
Dominic GarciaApr 5, 2021▶ 27:30Dominic Garcia – Risk-based Investing at New Mexico PERA (Capital Allocators, EP.187)
Insight
Garcia: Institutional investors are risk allocators first, not capital allocators
“And I think some of the best things that I learned was portfolio construction and understanding that we're not capital allocators. We're actually risk allocators first.”
Dominic GarciaApr 5, 2021▶ 11:28Dominic Garcia – Risk-based Investing at New Mexico PERA (Capital Allocators, EP.187)
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