Kevin Cullinan is Connecticut’s first chief risk officer, state Treasurer Shawn Wooden announced.
Cullinan, who started July 29, will develop an enterprise risk management framework for the Connecticut Retirement Plans and Trust Funds that uses advanced risk management concepts and objectives suitable for a large, complex investment program, Wooden said in a statement Tuesday.
“I’m excited to be a part of an initiative with a new level of capabilities and discipline, and bring my several decades of experience to lead this role,” Cullinan said.
Previously, Cullinan consulted on risk management with Kaiser Permanente and led risk management in senior executive roles with State Street Global Advisors and GE Asset Management.
“Since the state’s pension funds are still underfunded, there is pressure to increase returns in a currently low interest rate environment,” said Howard Cure, director of municipal bond research for Evercore Wealth Management.
Connecticut this year received its first two upward swings to its general obligation rating, reversing a downward trend over budget imbalance and unfunded pension liability.
Kroll Bond Rating Agency last month revised its outlook to stable from negative while affirming its AA-minus rating. S&P Global Ratings in March bumped its outlook to positive from stable on its A rating.
Moody’s Investors Service rates Connecticut GOs A1, while Fitch Ratings rates them A-plus. Outlooks from Moody's and Fitch are stable.
Questions surround the new hire, according to Cure.
“Will the new chief risk officer be looking to alternative investments, such as hedge funds, to increase yield?” he said. “Also, what role, if any, will he have on some of the political issues surrounding investments in pensions such as putting more of the burden on Connecticut towns and cities to fund a portion of school pensions and, if so, what guidance can he offer?”
Ongoing matters, Cure added, will include divestments from companies based on social issues such as tobacco companies or board of director diversity.
As a vice president at GE from 2013 to 2016, Cullinan oversaw GE Pension Fund’s $27 billion of externally managed investment strategies and led the effort to formalize risk policies, process and guidelines. He was GE’s risk manager for alternative assets from 2005 to 2012 and risk analyst-for public equities from 2002 to 2004.
“In today’s complex investment environment it is imperative―as we adjust our investment return assumptions and risk tolerance for our largest pension plans―that we have someone who understands the risks inherent in the global capital markets where we invest,” Wooden said.
“The goal is to produce better risk adjusted returns for the CRPTF while protecting taxpayers.”
Cullinan, a graduate of the University of Notre Dame, is a longtime resident of Fairfield, Connecticut, where he lives with his wife and four children.
