‘Everyone Was Shocked’: Investment Committee Members Resign After Hartford HealthCare Fires Staff, Hires Morgan Stanley


Five members of Hartford HealthCare’s investment committee have resigned after the organization suddenly fired all of its investment staff and hired Morgan Stanley as its outsourced chief investment officer.

Anne Martin, CIO of Wesleyan University, Harshal Chaudhari, CIO of General Electric, Cynthia Steer, Gary Draghi, director of investments for the city of Hartford, and David Roth, chairman of the committee, all resigned from their seats within a day and a half, according to Roth.

“Everyone was shocked,” Roth said over the phone through the investment committee. “When I watch people’s faces, I think people couldn’t believe what was going on.”

The investment committee learned that HHC’s board had decided to hire an OCIO and lay off employees on Tuesday — the same day Institutional Investor initially reported that HHC had laid off some employees and was planning a switch to the model.

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Seen in his resignation email from IIRoth called the process “unacceptable”.

“Despite the subcommittee’s delegated responsibilities, responsibilities and duties, we were never briefed, engaged or consulted regarding the decision to move to an outsourced CIO and investment office model, nor, following that decision, the question of who should be considered and selected as OCIO ‘ Roth said in the email.

“There was a complete lack of transparency and a deliberate circumvention of the subcommittee and usurpation of its role,” he added. “Personally, as Chair, I was not even afforded the courtesy of being briefed and given the opportunity to raise the issue.”

Former HHC CIO David Holmgren could not be reached for comment. Morgan Stanley declined to comment on the news.

“Hartford HealthCare’s mutual funds have performed well over many years,” a hospital system spokesman said via email. “The investment team’s acumen has earned national recognition from investment industry professionals. We are grateful for the many contributions of these colleagues and will support them as they transition, either into new roles within the organization or into positions outside of Hartford HealthCare.”

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Choosing the OCIO route is unconventional, say industry experts. Hartford HealthCare has about $4.3 billion in assets under management and has a complicated portfolio of partnerships, niche managers, and illiquid assets that will be difficult to unwind, especially if there is no staff left for the new OCIO.

The timing is also notable: Less than a year ago, Hartford HealthCare hired junior staff to help manage its investments. In addition, the team recently moved to new offices.

“Our portfolio will benefit from Morgan Stanley’s extensive bank of research analysts, market strategists and investment managers,” the spokesman said in a statement. “A dedicated team will provide HHC with a full range of investment management, fiduciary and operational services.”

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Roth said he was previously unaware that Morgan Stanley had an OCIO division.

Holmgren and his team seem poised to find attractive opportunities elsewhere. Hartford HealthCare reported positive returns for the year ended June 30, 2022 – an impressive performance for most investment organizations over the same period.

Former board members, meanwhile, remain concerned about the future of the hospital.

“I still believe in the care of the hospital, but I worry that discerning donors will question the management of their dollars,” Roth said.

—Julie Segal contributed to this coverage.



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