Sean Helverson, our Asset Owners practice lead, was recently featured in FIN News' Emerging Manager Monthly discussing diversity trends among CIO and deputy CIO hires. We spoke to him about what he's seeing across the market.

What's driving the rise in diverse deputy CIO appointments?

Intentionality, mostly. The institutions doing this well have stopped treating the deputy seat as a holding pattern and started treating it as a genuine development role. That means giving people real exposure ahead of time to Board/Committee and team management, and significant top-down investment responsibilities for the office; rather than just handing out a title and hoping the rest follows.

Does the deputy CIO title actually guarantee a path to CIO?

No, it certainly helps but that's worth being honest about. We've seen deputies leave before an internal search even opens (often for a different CIO role), and we've seen searches where the deputy wasn't the successful candidate. While the title signals a view of their real potential, it doesn't guarantee outcome. What tends to matter more is whether the institution has been deliberate about expanding that person's remit long before the seat becomes vacant, and whether the Board/Committee is happy with the office as-is (understanding a deputy CIO is their own person/investor, but significant performance issues may bias towards an external hire).

What are the benefits of having a diverse senior investment team for an LP?

Diversity of people (i.e. diversity of race, gender, and orientation) means different life experiences and perspectives, which can be a huge edge for any team, including LP investment offices. Given recent performance and portfolio issues, some Boards and Committees are evaluating their offices (whether with an OCIO or in-house team) and whether alternative models and approaches should be considered. We believe a search firm that considers both traditional talent from the same LP group, as well as from other LPs and multi-asset GPs, is more likely to produce a qualified, diverse candidate pool, with great diversity of thought and potential for the right amount of investment differentiation and outcomes.

What are you actually seeing on the ground with AI adoption at LPs?

Real, but measured for most. Some of the use cases right now include operational efficiencies, doing some of the legwork of creating a GP profile/memo, or getting a more sophisticated and faster read on portfolio exposures and scenarios. Nobody is suggesting it replaces the judgment calls that sit at the centre of the job. Where it is shifting things is in what institutions look for in more junior hires, and overall appreciating talent with the curiosity and/or fluency with the tools matter more than they did two years ago.

Any final thought for institutions thinking about their own bench strength?

Start the conversation before you need to. The institutions that handle this best are the ones where the CIO and the board have already had the harder conversation, who's ready, who isn't yet, and what needs to happen to close that gap. Waiting until a departure forces the issue tends to leave everyone, the institution and the candidate, in a weaker position, while hiring and retaining talent with long-term potential (especially at the MD/Director-level) is an investment that pays off.

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Read the full FIN News feature here (available to EMM subscribers) - Next In Line: Diverse Deputy CIO Hires | Emerging Manager Monthly

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