is hiring an executive from outside the mutual fund industry for a key role at American Beacon
| Paul Cavazos|
American Beacon Funds
Senior Vice President, Chief Investment Officer
Needles confirms that on June 20 Paul Cavazos
will join the Irving, Texas-based subadvised mutual fund shop as senior vice president and chief investment officer. The move comes after about a year of searching by Needles, supported by recruiting firm Korn Ferry
Cavazos has spent nearly nine years at Detroit-based DTE Energy Company
, working as chief investment officer and assistant treasurer. He oversaw DTE's $10 billion in retirement trust assets.
At American Beacon, Cavazos fills a gap left last year by Wyatt Crumpler
. Last year American Beacon also came under new ownership, private equity firms Kelso & Company
and Estancia Capital Management
Cavazos will oversee an investing team that includes nearly 10 people and works with 32 subadvisors across 26 mutual funds. American Beacon has about $50 billion in AUM, $25 billion of which is in its mutual funds.
"I've been overseeing the [investment] group at a high level" since Crumpler left, Needles says. "[Cavazos] is obviously going to take over the reins."
Needles says he was looking for three things in a CIO: a long-term view, "an appetite for innovation," and "a good cultural fit."
American Beacon doesn't tend to switch subadvisors frequently, Needles notes.
"We're not looking at short-term performance," Needles says. "We wanted someone who shared that view."
In terms of innovation, Needles says, American Beacon has been at the forefront of pension industry innovations like using private equity or liability-driven investing. Yet "not everything new is good."
"You have to be able to have this judgement. We look for two things when partnering with subadvisors: institutional quality and enduring value," Needles says. "We've passed on tens of billions of dollars of things that sounded really good or performed really well right out of the gate, and almost all of them blew up."
Needles also trumpets the company's "collegial and entrepreneurial" culture.
"You don't want someone to come in and wreak havoc with it," Needles says. "You want them to foster it and perpetuate it."
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