Boeing CIO Liz Tulach
As the Chief Investment Officer (CIO) at Boeing, Liz Tulach is partly responsible for the retirements of tens of thousands of past and present employees.
Condiment lovers across the globe are likely familiar with the iconic “57 varieties” slogan attached to Heinz ketchup bottles, first unveiled in 1896. Investors today could be forgiven for thinking it refers to the number of possible economic scenarios that could play out over the next 12 months.
To deal with that uncertainty, Kraft Heinz employees and retirees rely on Michael Jabs, who oversees the financial operations for all retirement plans and post-retirement medical plans globally. (Kraft and Heinz merged in 2015 to create one of the largest food companies in the world.) Totaling about $12 billion in assets across all plans, it’s no small task. We spoke with Jabs about his take on the economy, opportunities in AI, and his views on diversity and inclusion, among other topics.
Let’s start from the beginning. How did you get involved in the industry?
Well, I don’t think anyone very early on in their career says, ‘Gee, I really want to manage investments for a pension plan.’ But I did take maybe a bit of a more unique path into the industry. I studied statistics at Virginia Tech and started out down the actuarial science route. I’m a credentialed actuary and spent the first nine or so years of my career on the pension consulting side, working for one of the large consulting firms, before I had the opportunity to make the move to Kraft Heinz. From a retirement plan perspective, I spent time defining and calculating liabilities, and now I’m focused more on the asset side of the equation. But for many people who sit in what we’ll call a CIO role, you rely on a lot of experts and great internal and external partners, and that’s no different for me.
Can you offer your broad views on the market backdrop and the Fed’s ongoing efforts to fight inflation?
In my role I talk to a lot of partners, and we have a global footprint, so it’s more than just US-based managers. And I would say that through all of my conversations from, let’s say the end of mid-2022 until now, I don’t know that I have had one where a partner had any strong conviction one way or the other on how things are going to play out over the next year or so. There is so much uncertainty in so many different places and using that level of uncertainty to inform how we are investing, and how our managers are investing our money on our behalf, is one of the most important things from my perspective and our committee’s perspective. Because of how well we are positioned and how well-funded our plans are, we care more about downside risk protection. For that reason, having an air of caution, or understanding that there is a lot of uncertainty, and positioning around that is how we think about it internally. For the most part that is how our managers are thinking about it as well.
Talk about your thoughts on the importance of active vs. passive in such a volatile environment.
I would say that, personally and as a committee, we have spent a lot of time on this discussion. Like most, we agree wholeheartedly that there are opportunities and asset classes where active management makes more sense. You might argue in an environment of uncertainty that active managers have the chance to show their value, but again from a downside protection perspective and risk-return analysis and potential opportunity set there are places – particularly within our pension plan – where passive makes sense for us. So we use a mix, and we don’t have a blanket statement that all fixed income should be active, or all equity should be passive. It’s on a case-by-case basis, but we agree with the tenant of active management. Not all active managers are created equal, and thankfully we’ve had the benefit of working with some really good active management partners.
ESG is increasingly becoming a driver of investment decisions around the globe. How do you view ESG investing?
As an organization we take a lot of pride in sharing our progress in our annual report that we’ve been producing for the past several years, and the ways we are striving to do business better in terms of ESG. There are certain goals that we have set for ourselves, and as a company manufacturing and delivering food to people’s tables we very much believe in the improvements and opportunities in the ESG space. And in my role, it’s important to understand where the dollars are being allocated and how that might also impact every aspect of ESG. It’s a complex topic, and obviously we have money in a lot of different geographies, some where they are farther along than others, but we are mindful of improving the reporting on and understanding of where those dollars are going through an ESG lens.
AI has been one of the big stories of 2023. Any thoughts on the role of that in the investment management business?
I have a friend from college who’s doing a lot of good work in AI, and one of the things he mentioned to me is a phrase about how people working in AI are responsible for truly understanding how these tools can amplify or augment the business community, rather than replacing. That’s how I’ve started to reframe it in my own mind. There are ways AI can be used in the right spaces to accelerate our goals. We should be excited about the possibilities, but we’re not going to be jumping into any types of new technology without understanding the consequences that come with it. We are exploring a lot of things in our core business and being agile about how we do business, and AI can play a part in that and how we’re doing things from an investment landscape.
Diversity within the ranks of asset management is an important consideration at PGIM, and throughout the industry overall. Can you offer your views on the role diversity plays in your business?
Diversity within asset management is extremely important. At Kraft Heinz, we are very proud of the commitments we’ve made from a diversity, inclusion and belonging perspective. And more importantly, I’m so proud of how we’re putting that into action as a company. I will also say we absolutely see and benefit from companies that are prioritizing diversity as well. We want to be investing and partnering with other companies that have similarly strong values and beliefs as us.
What’s the biggest challenge in your role?
One of the things I’m most excited about but maybe even a bit worried about is retirement readiness. What does the future of retirement look like? There are a lot of exciting innovations going on and great partners doing a lot of things to think differently about retirement in a DC landscape. Parsing through some of those ideas and finding ways of best incorporating them into how we provide benefits to our employees can be a challenge.
What do you like to do to unwind outside of the office?
I’m a big proponent of the hybrid work environment and how we’ve been able to fine-tune it at Kraft Heinz. I really value my time in the office and with colleagues, and also with external partners, but I also very much value the flexibility of working from home and being able to be present in my three young kids’ lives. Getting to drop them at preschool, or help out in the classroom, or coaching baseball, those are the things that really dominate most of my time. My wife works really hard taking care of them, so I also like to give her a break, and spending time as a whole family is really what I look forward to the most outside of the office.