Institutional Investor is proud to recognize leaders within the allocator community for their outstanding contributions to portfolio development at the second annual AlphaEdge Recognition Dinner. Prior to the event, we sat down with May Vang, recognized in the category of Most Influential Women in Investment Management.
May is the Vice President of Treasury and Chief Investment Officer for Blue Cross and Blue Shield of Minnesota, the first and oldest non-profit Blue plan and market leader in Minnesota with over $15 billion in gross revenue. May plays a crucial role at Blue Cross and Blue Shield of Minnesota, overseeing key areas such as investments, balance sheet, capital, liquidity, capital markets, investor relations, rating agencies, and shared services. She is responsible for shaping the enterprise strategy in these domains and provides valuable insights to corporate boards, finance and investment committees, and audit committees.
Throughout her career, May has gained extensive experience in leading and optimizing investments, treasury, and shared services teams as strategic value partners. Her previous roles at Blue Cross include serving as Assistant Treasurer and Director of Treasury Operations from 2010 to 2017. Following that, she spent four years as Corporate Treasurer and Investor Relations Leader at American Family Insurance before returning to Blue Cross in 2021. May also held notable positions in finance at Lawson Software, G&K Services, and Ecolab.
May’s academic background includes an MBA and BS from the University of Minnesota Carlson School of Management. In her commitment to giving back, she actively participates on various boards, including the Blue Cross and Blue Shield of Minnesota Foundation, the Association of Financial Professionals (AFP), and the Insurance Women’s Investment Network (IWIN).
The following has been edited for length and clarity.
What is the biggest challenge facing the industry today?
A significant headwind is the lower-than-expected payment rates for Medicare Advantage, which will have far-reaching implications for healthcare insurers, particularly as this area represents a major growth opportunity.
The current economic landscape presents substantial challenges, most notably with inflation exerting upward pressure on healthcare costs. This escalation exacerbates accessibility issues and places additional strain on the entire healthcare system. Notably, healthcare inflation has consistently outpaced general inflation, creating further economic stress.
The advent of artificial intelligence (AI) brings both opportunities and challenges. As AI permeates various sectors and intensifies competition, we are keenly focused on understanding how it can either benefit or challenge our operations. Our goal is to strategically integrate AI in ways that align with and enhance our organizational objectives.
As a regulated and non-profit health insurer, we must exercise great caution in managing our capital and liquidity. Unlike for-profit entities, our capital resources are limited, making it crucial to optimize our portfolio diligently. Even minor changes can have significant impacts, underscoring the importance of meticulous financial management to support our operations and mission.
Given our status as an insurance-regulated organization, a substantial portion of our investments is allocated to fixed income, particularly bonds. Despite this, we maintain a diversified approach to risk management. As a total return-focused entity with a long-term perspective, we strive to make prudent and thoughtful decisions to sustain and enhance our operations.
How do you stay focused on the 20-year plan in the volatile world?
We continuously monitor headline risks and assess their impact on our portfolio. However, as long-term investors, our primary focus is on adhering to our strategic asset allocation (SAA). This involves evaluating risk-adjusted returns and maintaining a high-quality, diversified portfolio that aligns with regulatory requirements.
For instance, although election-related headlines may induce short-term market volatility, our analysis suggests that such events have historically had minimal long-term effects on investment outcomes. Consequently, these do not warrant significant changes to our strategies.
I consistently stress to our committees and boards the critical importance of adhering to our SAA, maintaining diversification, and upholding our investment objectives. These objectives include preserving capital, ensuring operational liquidity, and achieving risk-adjusted returns.
As a total return-focused portfolio, we recognize the vital role of investment income in supporting our mission, benefiting our members, and serving our community. We are also currently evaluating a social impact portfolio, which aims to address social determinants of health and promote racial health equity.
Which part of your portfolio are you most excited about?
Given the current economic landscape, we are excited about incorporating additional private credit strategies. Additionally, given our substantial holdings in bonds, the current higher interest rate environment is advantageous for us over the long run. As an insurance company operating under stringent regulatory constraints, we must navigate these limitations with strategic precision to achieve our investment objectives. This entails careful consideration of capital allocation and forging strategic partnerships.
Our enterprise manages portfolios totaling $4 billion, diversified across multiple strategies. In my dual role as Chief Investment Officer and Treasurer, I possess a unique perspective on the strategic and capital needs of the business. This vantage point enables me to effectively allocate resources and optimize our investment portfolios. I work closely with senior leaders across the organization to ensure our investments align with and support our strategic goals.
One notable achievement includes unlocking $80 million of previously restricted capital, which we successfully invested to further our mission and benefit the communities we serve. Additionally, we implemented strategic initiatives that repositioned 80% of our portfolio, resulting in a 200-basis point increase in returns along with enhanced cash flows.
These efforts significantly bolstered our bottom line and were the result of extensive coordination across multiple teams, and I am immensely proud of my team’s contributions to these successes.
Who were your mentors, and what made you get into this industry?
Throughout my career, I have benefited from both informal and formal mentorships. I find that informal mentorships often stem from authentic relationships that develop over time. For instance, I’ve admired certain leaders from a distance – whether for their powerful speaking abilities or their exceptional expertise – and have intentionally sought opportunities to engage with them, even if just over a brief coffee meeting.
However, I believe that sponsorship is even more crucial, particularly for women and underrepresented groups. Unlike mentorship, sponsorship involves a sponsor who actively advocates for your inclusion in significant projects and roles. This advocacy ensures that your name is brought up in important discussions behind closed doors, which can have a transformative impact on your career. It is through such sponsorship that has supported me in my professional journey.
If you weren’t in the allocator seat, what would you be doing and why?
I would be a fashion designer in Paris or New York (I’d be doing couture evening gowns); I attempted it twice. Out of school, my parents said, “No. You need a job that’s going to be make you money.”
The other time, my career got stagnant, and I told my husband, “I have to do this.” I got accepted into the Fashion Institute of Design & Merchandising, and I was going to go, but I think it was my little mid-life crisis.
What is the one actionable thing that you’d like to change about the industry?
I would like to drive DEI and inclusion in investments. As professionals, we are committed to cultivating a diverse talent pipeline. Diverse teams consistently deliver boosts performance and economic returns. It is imperative to embed DEI into our core values permanently, moving beyond superficial gestures to ensure genuine participation and value for all voices in meetings and decision making.
True inclusion fosters an environment where every team member feels heard and can contribute openly. This culture promotes robust problem-solving and decision-making. Although DEI discussions often focus on race and gender, genuine inclusion encompasses diverse perspectives and is crucial for fostering innovation and achieving long-term success in the industry.
In addition, early development of diverse talent pipelines in investments is essential to introducing young individuals to career opportunities. By championing DEI, we empower diverse voices to innovate and lead, shaping a more equitable future in investments.
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