PHOENIX – Former Washington State Treasurer Jim McIntire has joined Star Mountain Capital, a lower middle-market asset management firm, as a strategic advisor serving public pensions and other institutional investors.
McIntire, who served as state treasurer from January 2009 until January, will continue to be based in Washington while working for New York City-based Star Mountain. Star Mountain chief executive officer Brett Hickey said that McIntire's experience overseeing public pension investments makes him an ideal man to help pension funds invest in the middle market where Star Mountain focuses.
"That's what Jim is helping us do, he's helping us educate the large institutional investors," Hickey told The Bond Buyer. "He just has a really good network of people. He understands what we're doing and understands the challenges."
The municipal market has become increasingly aware of the pension challenges that many bond issuers face, with large unfunded liabilities creating significant long-term financial pressure for many states and localities. Some of the country's largest public pension funds, such as the California Public Employees' Retirement System, have begun to modify their expected investment return projections to reflect the more modest trajectory their earnings have been on in recent years.
Hickey said that there are many investable businesses generating between $10 million and $150 million in annual revenues that thanks to technological improvements like cloud computing can compete more effectively in the marketplace than was possible in the past. But many large investors such as public pension funds miss the chance to make these kinds of investments, said Hickey.
"Many large pension funds are often unable to invest in the lower end of the middle-market due to lack of personnel resources and economies of scale," Hickey said. "With limited investment staff they must make larger investments in mega funds with high risk concentrations, even if it means bypassing higher risk-adjusted returns by investing in smaller businesses with stronger growth potential. Jim is working with us to bridge this gap and help educate pension funds and other large institutional investors on how Star Mountain's unique business model can provide them with cost-effective solutions to access the growth engine of America, U.S. small and medium-sized businesses."
