SBCERA's Don Pierce: Why Cash Has Option Value in Private Markets

November 11, 2025 00:21:42
SBCERA's Don Pierce: Why Cash Has Option Value in Private Markets
The Institutional Edge: Real allocators. Real alpha.
SBCERA's Don Pierce: Why Cash Has Option Value in Private Markets

Nov 11 2025 | 00:21:42

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Show Notes

How does a $20B+ pension fund generate $1 billion in gains from rebalancing alone?

In Episode 14 of “The Institutional Edge,” host Angelo Calvello sits down with Don Pierce, Chief Investment Officer at San Bernardino County Employees' Retirement Association (SBCERA). Don shares his distinctive income-first approach to private markets investing, including a 50% allocation across private equity, credit, and real commodities. He discusses SBCERA's recent European credit expansion, innovative master custody arrangements enabling emerging manager access, and the philosophy behind owning real assets versus traditional funds. Don also addresses practical challenges of managing illiquidity and shares his perspective on AI for investment forecasting versus operational efficiency, emphasizing his quantitative, numbers-driven investment approach.

Donald Pierce serves as Chief Investment Officer at San Bernardino County Employees' Retirement Association (SBCERA), a position he has held since October 2010. He is responsible for day-to-day operations of the investment division, including policy development, investment objectives, and manager selection. Don has served as an Investment Officer at SBCERA since 2001, having previously worked with Watson Wyatt for nearly four years on pensions, healthcare, and investments. He spearheaded SBCERA's rebalancing methodology, which has contributed over $1 billion in gains since 2006. Don holds a Bachelor of Science in Statistics from San Diego State University and is a CFA charter holder.

In This Episode:

(00:00)  Introduction of guest Don Pierce, discussion of his role at SBCERA 

(02:46) Quick-fire round with Don, exploring passion versus numbers approach

(03:43) Private markets portfolio overview, allocation breakdown across asset classes

(05:52) European credit expansion strategy, diversifying private credit exposure globally

(11:28) Alternative asset opportunities in cattle, grain silos, and commodities investing

(19:09) Managing illiquidity challenges and portfolio construction in private markets

(28:17) Governance innovations - emerging manager programs and master custody arrangements

(31:06) Perspectives on AI implementation and alternatives in 401k plans


Like, subscribe, and share this episode with someone who might be interested!

Dr. Angelo Calvello is a serial innovator and co-founder of multiple investment firms, including Rosetta Analytics and Blue Diamond Asset Management. He leverages his extensive professional network and reputation for authentic thought leadership to curate conversations with genuinely innovative allocators.

As the "Dissident" columnist for Institutional Investor and former "Doctor Is In" columnist for Chief Investment Officer (winner of the 2016 Jesse H. Neal Award), Calvello has become a leading voice challenging conventional investment wisdom.

Beyond his professional pursuits, Calvello serves as Chairman of the Maryland State Retirement and Pension System's Climate Advisory Panel, Chairman of the Board of Outreach with Lacrosse and Schools (OWLS Lacrosse), a nonprofit organization creating opportunities for at-risk youths in Chicago, and trustee for a Chicago-area police pension fund. His career-long focus on leveraging innovation to deliver superior client outcomes makes him the ideal host for cutting-edge institutional investing conversations.

Resources:
SBCERA: https://www.sbcera.org/
Email Angelo: [email protected]
Email Julie: [email protected]
Pensions & Investments
Dr. Angelo Calvello LinkedIn

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Episode Transcript

[00:00:00] Speaker A: I think for every business to start is not that difficult. It just takes you courage. You start and you are there. But then keep where you are is a difficult thing behind the scenes. Takes a lot of tears, effort and courage to be what I am. [00:00:16] Speaker B: Welcome to skin deep. I'm Dr. Anna Chacon and today we have a very special guest joining us. Get ready for some expert insights you won't want to miss. She's a world famous fashion designer specializing in exotic skins. As far as we know, you are the only one in the world that does this, correct? [00:00:40] Speaker A: Well, no, there is other, other factories and other brands that they do exotics, including Hermes and Dior. They all do exotics. But I am, I only do. I mean now, not anymore because now I'm doing leathers as well. But my main how I started was with python and then I started expanding to other materials like crocodile. And right now besides exotics, I'm also doing leathers and any other type of materials. Plus I am expanding my accessory line to clothing line is something. It's not launched yet. We hope to launch it in May, but it's, it's a project that we, we have. So not anymore, just exotics now it's a little bit of everything. [00:01:23] Speaker B: How you started developing that. I think you told me when we first met that you had studied in Italy. Yes, I think with other famous people it could be Sony family. How you know, how did you Fergamo? Okay, okay. [00:01:38] Speaker A: Yeah. So I, I studied in Italy from 94 to 2006 years. I lived in Florence, I went to Polymor and this is where I met all of these people. I'm very social and they became my friends. And then through the years I'm. I'm doing what I'm doing and, and I came to Miami married with my husband. He's Greek, have two kids. I'm from Miami. So everything is like made, born in. Okay, what is it made in? Born in. Made in Italy, born in Miami. That's the slang of the brand by now. What else you want to know about how I started it was through a com. Like I before him, I was involved in different businesses. I was also selling purses. But eventually this business didn't go well. And in 2015 is when I started Jimena Cavalecas with a call of a very good friend of mine. The last name is Ferragamo and I don't know if you want to say that, but yeah. And this is how I started the whole thing. And my kids go to private school, they go to Oliver and the moms in Oliver were the ones that truly support me to start with my own business. And that's how I started. And then my first store, the first department store that actually asked me to start in the wholesale industry was Bergulf Gottman. That was my very first department store. And after Bergulf obviously the doors are open and I started to sell also in Blue Mindes, in Mimans, in Mod Operand, a lot of other sites and also international. Then the pandemic came. I opened my first flagship in Design District and after that one I did some pop ups in the Middle east and right now just selling retail, but I'm going back to the whole. [00:03:16] Speaker B: And was anyone in your family into fashion or even going to Europe or were you kind of the trailblazer that started? [00:03:25] Speaker A: One of the reasons why I went abroad and study is because I'm the youngest in the family and my brother sisters are much older than me. If anything my background is more like doctors medicine than fashion. We have no fashion at all in the, I mean I guess they dress well, but we have no fashion influence. I'm the only one in this industry that I adore what I do. Since I was born I really knew what I wanted to do. But my father passed when I was very little and I was like very close to him. And since then I went abroad at 15, almost 1514 I went for a boarding school in London and then I came back to Ecuador. I didn't want to live there and since then I have always not been in Ecuador, just living abroad and I live now in Miami. My all my family is in it. [00:04:15] Speaker B: I remember you did tell me about some of the ups and downs you had in fashion. Of course I've had ups and downs in medicine. That's definitely what makes you resilient as a business owner. Tell me a little bit about those ups and downs. And I remember you told me once about your failed initial business and how you were able to turn that around and what advice would you have for people who are, you know, start starting the online or going through the same thing, especially fashion. [00:04:46] Speaker A: And, and this is my industry. It has a lot of ups and downs. Like it's like a roller coaster. I everybody asked me, okay, it's what is this business? It's about being faster or it's about who you know the most on why you do the most. I think it's a business, it's an obstacle. And I always think this business as a, as a running competition and where you don't need to be it's not a resistance, is not obstacles, is just. It's just patient. I think you need to know where you're going. You need to focus on the obstacles because there will be a lot of obstacles. You need to be prepared for those. It's not easy. You have a lot of ups and downs. For example, before him and colleague as I had another business where it was a different name and everything. Instead of being made in Italy where I had all my knowledge because this is where I used to live and study and everything I decided to do made in China. So it was very low price point handbags. I was going to trade shows and selling these. But then the recession, 2011 that hit the United States. With that I had to close my business. And this is when I stopped everything. And when I told you that I started in 2015 thanks to my friend, it was a completely different business. And obviously my husband was not so much supportive of that because I already had a very big failure in my past business. Now when you get in the luxury segment is even more difficult. Being in the design district among all of these humongous brands is not. Is not easy at all. It's extremely difficult because I'm the only Latin, not even Latin. Forget about my personal self as a business, as a name. Ximena Cavalecas is a very small luxury brand compared to these giants. And. And to survive and be there, it takes a lot of courage. It takes a lot of passion. But I'm there, you know, surviving. I think you need to be resilient, very resilient in order to be. But I enjoy every moment because this is what I love. I love fashion. It's in my ox is my oxygen. I wouldn't be able to be without what I do. And I'm very thankful that I'm able to work and do things that I truly adore. [00:06:55] Speaker B: Excellent, excellent point. Yes. When you. When I look at what's in the Miami design district and tell me how you decided to open there as opposed to, you know, Dayland or Bell Harbor. But you're correct, I see you're basically surrounded by these corporate giants that they're even in the stock market. So you know, they have funding from basically the public that it's not one person, it's a huge corporation. You know, LVMH has, is one of the biggest growth stocks in the world. Yeah, yeah, the biggest in fashion. Have you thought about selling or merging into one of these where you can keep your line exclusive? But like how LVMH has a conglomerate of these high end brands. I'm just curious. [00:07:47] Speaker A: This is something that I believe and I. And this is personal, right? I always think or thought that every Hollywood or every celebrity's dream is to make a perfume. I swear. And I think every fashion designer the dream is to sell the business. Like for example Tom Ford that sold his business to in so many thousands of millions of dollars. So I don't know if I'm going to be able to get there. But yeah, why not? If I receive a very good offer for my business, I will consider my job done in Jimena Cavalecas and I will happily sell it. You build, I think unconsciously. Unconsciously every designer builds a business or builds a brand thinking that one day is going to be everywhere. Right? That is the big dream in every single city, in every single country. And for that to happen, a big corporation has to help you with the knowledge and obviously with the cash. That is insanely amount of cash that. [00:08:54] Speaker B: You would otherwise not have. Same with me as a practice. You would otherwise not have not be able to grow as big without. Without that. And then you could keep your exclusivity, your name, all of that stuff. And yeah, that. I mean that would be a great marriage. And how are you able to go to Italy? How often do you go? How did you end up picking your factory? I guess talk a little bit about the customs regulations which we learned as we were doing the doctor Pack could be very annoying and difficult to work around. [00:09:26] Speaker A: I kind of start from the custom situation. So it's extremely difficult. If I have white hair is because of that. It's almost impossible. So this is why probably not many brands work in exotics or with exotics. Because it's so difficult for a bag. Remember we had the case with the trolley bag. So I was bringing accessories and I always bring handbags. But then I bring a trolley. I never imagined that is in the customs. Fish and Wildlife is the segment is travels and is different. So you need to acquire a different license. So these are not obstacles, but they are little that stops you from. Because I could have delivered this three months, four months and it took so long. So it's a lot of patience is very difficult. And I am involved with the Fish and Wildlife in every bag that I sell that is python. They will like the people that buy them. The customer will find a little card that says a percentage of this bag is going to be donated to the Fish and Wildlife foundation of Florida. So I'm part of that. And even though I'm very involved and I have been doing things almost going to be 10 years in October 21st. I'll be 10 years with my business. Still I have to, I face this type of, I wouldn't say problems, but obstacles or delays with customs. So it's super, super difficult, extremely difficult. But if you like it and you love it, you know, it's a balance. I love what I do. It's difficult, it's not easy. You measure. I mean, I, I adore. Anything will stop me. I, I don't know. I mean, if I'm healthy and I, I'm, I'm here in this world, I will continue to do what I do. Cause it's, it's my oxygen. [00:11:09] Speaker B: How did you find your factory in Italy? I'm sure there's a lot of factories in Italy, but how did you. [00:11:15] Speaker A: Yeah, so, okay, then sometimes I say that I feel lucky, but then I have other friends and mentors that say no, luckiness doesn't exist. Is the moment that meets the opportunity or the capacity that you have to choose the right opportunity or to select the right opportunity. I don't know what it is. I'm just telling you that in my case, I have received the call of a very good friend of mine from a very good family in Italy in the fashion industry, very known that told me, you know, you need to go back to what you're doing because you're great at this and this start. And that's how I did it. Now being involved in Italy is very difficult to get into these factories that they make for a lot of luxury brands. So I started with this, this brand that makes for Ferragamo, that makes for Cloy, that makes for many other, many, many, many multiple brands. Gucci, you know, and brands, and they have the quality there. So I didn't have to put that much effort. It was very easy to start. I think for every business. No, to start is not that difficult. It just takes you courage. You start and you, you are there. But then keep where you are is a difficult thing. And by now I only not work with that factory. I do work with other factories and I started with the Crocodile like three, four years ago. I don't remember three years ago. I believe that I started with this, making custom made bags. This is a very exclusive factory, super high end, they call it laboratory. Not even a factory. Very difficult to get in. Easier to start in Harvard and to get into Harvard with these factories. And yeah, it's so difficult and I'm so blessed that I'm still there working with them. It's so nice. It's like a family. They really, once they get to know you, it's a different thing. They give you all the support, the knowledge, the. The everything. But it's not easy, I will have to say. Not at all. It seems if we make it look in Instagram, or when you go to the store, or when you talk to me and I'm somewhere, whatever, it seems very easy. But behind the scenes, takes a lot of tears, effort and courage to be. [00:13:24] Speaker B: Where I am and tell people a little bit. Two questions. The crocodiles, where they come from as well as any other leathers that you work with? We've worked with seal, we did a fur bag, we work with ostrich for the doctor bag. And go a little bit into the doctor bag and then I have to go see patients. [00:13:44] Speaker A: I'm sorry. Okay, so we started with python. This is the main factor that they work is in Italy, in Florence, in Tuscany, that area. And this factory is the factory of my friend. And they specialize in exotics. But I love the python print. So this is how I started. And then I, with the time and years, I got this crocodile factory. The crocodiles are mainly from Australia. This factory makes for the most luxurious names, brand names in the world. And everything is patent, everything has a name, everything has a code, everything has a permit, everything, etcetera, etcetera. My pythons are in Indonesia, we have farms in Indonesia. And then the skins travel. And in every handbag, when you buy the python, you see also a car where they disclose that this. Because we don't have pythons in Italy. Right. So what they do is that the skin goes from Indonesia, they travel to Italy. In Italy, they kind of like prepare the skins and the tannery where it makes the bags. And then ostrich and all these other animals is depending on where they are. But they are very careful because since they are very known factories, everything is very regulated. So we don't have hunting, we don't have killing the animals, none of that stuff. [00:15:00] Speaker B: And then tell, I guess the viewers how we came up with the doctor back together, what it is and how it's creating a fashionable spin to the doctor bag, the one that old school doctors used to go to a house with and see a patient. By the way, I did a house call yesterday with your doctor bag and the suitcase as well. [00:15:21] Speaker A: Nice. So first of all, the doctor bag is not my design, is your design. I remember you sending me a picture of your inspiration. And what would you like to have as a bag? Right? Yeah. And then we started from there. So the expertise of all these masters, which are amazing artisans, is what made this Dr. Barbie so special. The skins, the colors and broiler, everything. But this design, I have to say that is 100% Anna Chacon is yours. Yeah, you have a very good taste because before the doctor back you were my, my customer for my other Jimena Cabalitas pieces. And I, when I say, okay, let's, let's talk to Anna, let's meet Anna. Because of the selection that you have purchased, I, I was like, oh, this lady has very good taste. This is how this started. Then I make my very first trolley which is yours. That you have it, the carry on. Very nice. That is, is, is a design that we did it thinking of the skin. So when we. You chose the skin that you have 16 skins in that trolley, you know that, right? So because they're very little and these skins were made for a very, I don't know if I can say the name of who, you know, who these skins were meant to be for. We shaped the, the shape of the carry on with that skins because they all have to be hand to hand. And I have a videos actually from the, the artist, I'm saying how he glued every single skin with a special material to make it look as a one piece. It's really a masterpiece. It's like what you have there is art, so you better take care of it. [00:17:06] Speaker B: And that's why we need to do the event. That's why we need to do the event. I don't know if I could personally sell, sell them because I use them, you know, they're, it's my profession, you know, it's, it's exactly like the most fashionable doctor bag you can find. But we can reproduce them, you know, we'll talk about it. [00:17:24] Speaker A: I'm in for it. And, and you know, regardless of the material because obviously your bags are crocodile. So in exotics is like the top of the top. But we can do is I believe in quality. So if, if you have a good artisan working in what, regardless the skin that we can make it more affordable for everyone, we can do it. Italy for me is France also of course, amazing. But I have the knowledge with my Italian factories and I think we can achieve something amazing, exquisite with amazing quality that will last forever. And it doesn't have to be crocodile. Could be leather, could be fabric, could be anything that you select is your, your design. So you, you tell me and you design it. Actually you are the one that sent me. Yeah. Yes. Yeah, let's do that. I will celebrate you. You have so many doctor bags. We should do it so that you show your amazing collection, because people have to see this. These beauties, they're gorgeous. [00:18:17] Speaker B: Thank you. And then last but not least, I know you have two kids. How do you balance this woman with an international business and fame, you know, with family and your relationship too. I'm sure it's not easy getting on a plane, going to Italy, leaving your family behind to work. [00:18:37] Speaker A: Yes, it is not easy. But, you know, almost my kids grow up with me working, so they are used to what I do. And they know, I think is it's a lot of organization, you know, get your calendar and plan. A lot of planning, A lot of talking between the family. Now my kids are teenagers, so you think that when they're little, it's very difficult, but not small kids, small problems, Big kids, big problems. Now they're teenagers, so they need me more. I don't know if they need me more. They don't want to see me. They are teenagers. They just want to be by themselves. But I feel that I need to be with them more because of this age and that is, you know, it's a special particular age. But my husband helps me a lot. I have a lot of support from my husband. And sometimes, believe it or not, I'm from Ecuador, I live here by nobody. Everybody's in Ecuador. And my husband the same. He's Greek and all his family is in Greece. So sometimes if I have to travel and he's coming with me for support or help or whatever, I have to bring someone from Ecuador to stay at home with the kids while we are away. So not easy neither in that aspect. But, you know, when you have the love and passion for what you do and you really want to achieve your goal with, for me is like, grow the brand and one day be everywhere, in every country in the world. You have to do these sacrifices and. And just keep going, follow your dream. [00:20:01] Speaker B: Last thing, the collaborations, the international collaborations that you've done, how did those come about? [00:20:08] Speaker A: You know, my brand is mainly international. I am in Miami, I'm based in Miami, but it's made in Italy. And then when that just when made in Italy, but you sell your. Your. No from Miami, you just get there international. And with Missoni, for example, when I did my collaboration with Margarita, that was one of the biggest, amazing, the best things I've done. She's gorgeous, she's really nice. She's a good friend. And, you know, the brand you already are, you know, close to a very big brand. And that helped me tremendously. I will recommend if anybody's in this type of business or in any business, I believe that I need to be surrounded with people that I believe they are better. Not better, but more experienced than myself, more knowledgeable than myself, more very successful in whatever they do. That's why I'm with you. I truly admire you for what you are, for what you do. You are a doctor. You are a woman. You have grown so much now. You look amazing, by the way, also in the fat. Thanks me. So it's good to be surrounded with people that they like to succeed. And that's what I do. Yeah. [00:21:15] Speaker B: Or people you can learn from, like. [00:21:17] Speaker A: Or, you know, I will say essential. Yes. Thank you for being here. Nice talking to you. Sam.

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