Tuesday, July 5, 2022 Jul 5, 2022
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Why You Need to Know Cheryl Alston

The executive director of Employees’ Retirement Fund of the City of Dallas stewards public pensions.
By Thomas Korosec |

Because the Dallas public pension fund she manages is long on returns—and short on embarrassing headlines. Think of the $3.3 billion Employees Retirement Fund of the City of Dallas as the “other” Dallas public pension fund—the one that didn’t go in for vineyards or luxury condo towers, but quietly stuck to risk-reward investing. 

Connecticut-born Alston, who’s 49, has been executive director and chief investment officer for the fund, which covers the city’s civilian employees, since 2004. During those 10 or so years the fund has posted average returns of 8 percent a year, putting it in the top 13th percentile of 408 U.S. public pension funds, according to data compiled by research firm Wilshire Associates.

Alston says credit for that should go to her board, whose seven members all have financial expertise and support an investment approach that she describes as conservative and opportunistic. “We look at risk, return, and liquidity,” Alston explains. “A lot of investors like illiquid investments and in [the financial crisis of] ’08, that hurt them. They had to sell assets to make their payout.”

She recalls being pitched collateralized debt obligations—pools of risky mortgage debt—at the height of the credit bubble in 2007. She passed because it wasn’t clear how they were supposed to make money, she says.

In 2008 Alston’s fund held mostly traditional stocks and bonds. That positioned her to be “a little bit contrarian,” as she puts it, during the financial meltdown that fall and winter. “One of the people I’ve looked up to is Howard Marks, who runs Oaktree Capital in Los Angeles,” she says. “I remember him telling me, ‘When everyone is running out of the room, run in and see if there’s some value that’s been overlooked.’”

In early 2009, the fund—which sets asset allocation goals and then hires money managers to make specific investments—made its first real estate investments through funds holding high-quality properties. “These were core real estate, cash-flowing, 80-percent-occupied, stable properties that were losing their value at the same rate of what we considered junk,” she says.

In a similarly contrarian move early this winter, the fund bought master limited partnerships. These high-yielding securities—tied to midstream pipelines and other oil and gas assets—had seen prices fall because of the drop in energy prices.

Says board chair Carla Brewer of Alston: “She sees the big picture, how an investment opportunity might help us. She’s just very smart.” 

As the director of a fund in which women and minorities are well represented among 14,000 active participants and retirees, Alston says she looks to hire smaller investment companies and those led by women and minorities through the fund’s “Next Generation” program. “We give them a percentage of the fund,” she says, adding that they are judged by the same criteria as other advisers.

Alston’s interest in finance dates back to high school, when she held two summer jobs. One was the 10 p.m. to 6 a.m. weekend shift at a donut shop. The other was at a bank. She preferred the bank.

Her parents, a nurse and a truck driver, sacrificed to afford her tuition at an all-girls Catholic high school in Milford, Connecticut. After her mother encouraged her to take a shot at the Ivy League, Alston got into the University of Pennsylvania. She graduated from its Wharton School of Business in 1988.

After a series of investment banking and real estate positions at Chase Global Services in New York, Alston worked for six years in the retirement and investment services division of Cigna Corp. There, she met her future husband, Roy Alston, a leadership training consultant. The couple decided to move to Dallas—where Roy had worked in an earlier position—and they bought a house in Frisco.

Alston had begun thinking about a job involving less travel when she heard the fund was looking for an executive director. Her interview went so well, they made an offer as she was driving home.

Between work and raising two daughters—a 7-year-old and a 21-year-old—Alston staffs a host of volunteer positions. They include chairing the investment subcommittee for Christus Health, chairing the board of the Volunteer Center of North Texas, and filling a presidential appointment as an advisory committee member of the Pension Benefit Guaranty Corp.

“I don’t have a lot of money, but I do have time,” she says. “So I try to give back.”