PGIM’s Vantage Point Series is written for C-level executives and is intended to offer a glimpse into the issues that are important to these decision makers.
When you oversee one of the country’s largest corporate pension plans, you can’t just wing it.
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. With diverse industry exposure and a background in accounting and private equity, among other things, it’s clear that Tulach has the experience for the job. She was previously Boeing's deputy CIO and had prior stints as a senior vice president at GE Capital and as an assistant vice president and director of private equity at the University of Chicago.
We spoke with Tulach about her start in the industry, her views on the markets, and the excitement surrounding AI, to name a few topics.
How did you get started in the investment-management industry?
I never intended to get into this business. I started out as an accountant and met a colleague who had an investing background. He joined the endowment at the University of Chicago and one day called me out of the blue and suggested I interview for an analyst position on his team. I really wanted to go to school at Chicago for my undergrad degree, but I come from pretty humble beginnings and it was more than I could afford. So it was a very attractive opportunity for me to work at an iconic institution and also pursue a master’s degree in the evening program. I quickly fell in love with investing, and it turned into a passion. After receiving my MBA, I completed the CFA program which broadened my horizons. I thrive when I’m able to make investments that ultimately advance the mission of those I represent, whether it be the endowment back then or the participants in our plan at Boeing today.
Can you offer your broad views on the market backdrop and the Fed’s ongoing efforts to fight inflation?
It's certainly the most interesting market environment we’ve seen in a while. After 10-plus years of central bank intervention, the Fed is closing in on its goal of normalizing rates and we’ll wait to see if inflation actually cools enough to meet their goals. The rest of the world, outside of the US, is getting more interesting, and things look better for fixed income as an asset class. And there are always pockets of opportunity across asset classes if you look hard enough.
Talk about your thoughts on the importance of active vs. passive in such a volatile environment?
I have a strong preference for active. In the most recent market environment, it didn’t really matter as much because passive performed. But I know our active managers will continue to add value, especially in markets where there’s going to be more uncertainty and volatility going forward. In the short term, passive may appear to meet goals with lower fees, but long term, I believe active management will be differentiating.
How do you view ESG investing?
It’s interesting because it has always been really important to us as outlined in our company values and corporate governance principles – we’ve always focused on good governance and good social outcomes. But I think the ‘E’ can be harder to address. The ‘E’ means different things to different people. In order for us to invest more in that space we need clear regulation on what pensions can do and a common understanding. From a plan perspective, we continue to think about how to best invest there, and first and foremost it’s always about generating the best returns for our participants. We do talk to our managers about ESG, asking them how they address it and define it, but we would like firmer regulatory guidance to give us the runway to invest more.
AI has been one of the big stories of 2023. Any thoughts on the role of that in the investment management business?
I think it’s one of the most exciting conversations we’ve had since the dot-com era, and I’m really excited about the opportunities to become more efficient and productive by using AI within our team. I don’t, however, think it’s going to be a replacement for innovative thinking. It will make the more mundane tasks like data input more efficient, but there’s a certain creativity that comes with the human mind that I don’t think a computer can replicate. From an investing standpoint, we have investments across the venture landscape in AI and generative AI. It will likely offer great benefits and rewards in the future, but we need to tread carefully here and not feed into the hype.
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?
When I started in this business, it was rare to see another woman in the room, either across the table at an investment manager or at a meeting with other LPs. I’m so excited about where the industry is going but frustrated that we haven’t made more progress. I think we’ve made strides in the representation of women, but true diversity – that is, including all – is where we’ve lagged as an industry. It’s just not enough to say you have diversity of thought and then you look around the room and everyone looks the same. You need diversity of people – whether it’s women, people of color, or neuro diversity. I also think it needs to start at an earlier stage; it’s too late to start at the college level and just recruit. We have to go out as an industry to high schools and introduce diverse candidates to this dynamic field. We’ll have met our goal when we don’t need to talk about it because everyone is included.
What’s the biggest challenge in your role?
Not having enough time. I am intellectually curious and love the conversations with my talented team and our managers, and I find myself always wanting to learn more, read more, and do more. If you are passionate about this business, you can’t turn it off. We always need to make sure we’re meeting the objectives of our participants, so I also like to stay in touch with them and listen to their concerns. There’s always something new to learn, but that’s what makes this role so interesting and rewarding.
What do you like to do to unwind outside of the office?
I’m truly blessed to be mom to my twelve-year old daughter and ten-year old son. I am also incredibly lucky to have a very supportive husband. These three keep me laughing but are also my toughest critics. When I’m not working, I like to spend time with my family, and I especially enjoy viewing the world through my kids’ eyes. I love to travel, read and stay active, but again it comes back to time. Patience isn’t always one of my virtues so I’m learning how to slow down and take in all the special moments.