The city's Board of Pensions and Retirement has hired the son of longtime Register of Wills Ron Donatucci to be the chief investment officer of the city's beleaguered pension fund.
Michael Donatucci, 30, is currently an investment strategist at SEI Institutional Group, a Montgomery County-based asset management firm. He has been with the firm for eight years. He will be paid $175,000 in his new position.
Rob Dubow, pension board chairman and the city's finance director, said Donatucci had "precisely the level of experience and expertise necessary" for the job.
Dubow said Donatucci's family connections did not influence the board's decision. Donatucci was one of hundreds to apply and one of four to get to the interview phase.
"Our conclusion," Dubow said, "was that it's not fair to him that his name should disqualify him."
Donatucci will replace Brad Woolworth, who took the helm last year but recently announced he was leaving for family reasons. Woolworth's last day is April 29. Donatucci starts June 1.
"I'm very excited about the opportunity," Donatucci said after the pension board's unanimous decision Thursday to hire him. "I've been working with pensions for almost 10 years now, and it's a great opportunity to give back to the public sector."
Donatucci, who has an economics degree from the University of Pennsylvania, started with SEI as an investment analyst. Since 2013, he has been advising private and public institutions on asset allocation.
Donatucci said his portfolio included public and private pension funds, the highest valued at $2 billion. Some of his public pension clients were municipalities such as Groton, Conn., and Royal Oak, Mich.
Sam Katz, former chair of the city's fiscal watchdog board PICA, said he was encouraged by the eight years Donatucci worked at SEI, calling the firm one of the best in the country.
Katz was dubious that Donatucci could make much of a difference in the status of the fund, which is one of the worst-financed in the country. The fund is $5.7 billion short of its $11 billion obligation to city workers' pensions.
"The pension fund is a massive crisis. I don't see the CIO central to that crisis," Katz said. "They could've hired Warren Buffett and I don't think he could solve the city's pension crisis."
Katz is of the mind-set that unless city assets are sold to infuse the fund with a lot of cash, the pension fund will continue to suffer.
Donatucci said he has read through the pension board's publicly available documents and knows he is in for a challenge. He plans to reduce the fund's cash allocation, evaluate how much the city spends on managers and their respective returns, and cut poorly performing hedge funds.
"They've been a drag on the performance of the pension plan the last 10 years," he said in reference to the hedge funds.