How I Invest with David Weisburd
Episode 292: How the Former CalPERS CIO Built a High-Performance Investment Culture
Date: January 28, 2026
Guest: Nicole (Former CIO of CalPERS, Co-founder of Square Nine Capital)

Episode Overview

This episode features Nicole, the former Chief Investment Officer of CalPERS (California Public Employees’ Retirement System) and current co-founder of Square Nine Capital. The conversation dives into her transition from Ontario Teachers’ Pension Plan to CalPERS, the cultural and operational transformation she led at CalPERS, the implementation of the Total Portfolio Approach (TPA), challenges of institutional investing, strategies for co-investment, and the founding philosophy behind her new firm. Nicole emphasizes mission-driven leadership, organizational change, modern investment culture, and the nuances of bridging LP and GP perspectives.

Main Discussion Points & Insights

1. Mission-Driven Career and the Jump to CalPERS

Nicole’s Motivation (00:15)

• Nicole highlights her mission-oriented approach to investing, inspired by her years at Ontario Teachers’ Pension Plan.
• The opportunity at CalPERS attracted her as a chance to bring Canadian-style governance and the total portfolio approach to the US’s largest pension fund.
• Quote: “I really have always just been very mission driven... being able to bring that toolkit... what a great time in my career to do that.” (00:15–01:19)

2. Transforming CalPERS: Implementing TPA and Culture Change

Listening Tour & Early Observations (01:43)

• Nicole describes her first 90 days as a “big listening tour,” identifying organizational silos and accountability issues, especially heightened by remote work during COVID.
• She emphasized starting with culture rather than formal structural changes, using governance as the foundation for TPA implementation.

Breaking Down the Silos (03:10)

• She introduced a unified investment committee, bringing all asset class heads to the table rather than operating separate committees.
• The early focus was on collaboration, transparency, and accountability. Nicole deliberately avoided formalizing TPA until the groundwork was laid with team discussions and cross-silo engagement.
• “Let’s think like asset owners, not asset allocators... Allocators feels very passive.” (06:10)

Upstream Drivers of Culture: Incentives and Collaboration (07:23)

• Nicole realigned compensation to match performance and emphasized synchronized in-person collaboration (the “teaching hospital” model).
• Joint decision-making extended beyond investments to risk, portfolio construction, and administrative work—aiming for shared responsibility.

3. Board Partnerships and Governance

Building Trust with the Board (12:09)

• Nicole stresses that successful delegation and agility depend on board trust and shared purpose—focused on stakeholders' retirements, not control.
• Transparent, regular education and communication with the board were prioritized to ensure alignment before seeking autonomy.
• Quote: “You have to start there. You have to join arms and start there.” (12:37)
• “There’s really no other way to have success other than be in a partnership with the board.” (14:04)

4. Redefining GP & LP Relationships and Co-Investment Strategy

Becoming a True Capital Partner (16:01)

• Nicole describes the lost decade in CalPERS' private equity allocation: under-investing, missed co-investment opportunities, and lack of high-conviction partnerships.
• Her strategy: deep dive into private markets, identifying and leaning into “high-conviction” GPs, and building a programmatic approach to co-investment.
• “Let’s not be in a position where we’re not able to give a quick no. Those are as important as delivering yeses.” (16:01–19:40)

Strategic Programmatic Co-Investment (21:55)

• Structural alpha isn't always about sophisticated edges; at CalPERS’ scale, lower fees via co-investments are a significant return driver.
• “Removing the sand from the gears, being better partners, leaning into the partners we have high conviction on.” (22:43–24:34)

5. Portfolio Construction Today: Private Markets and Credit

Where Can CalPERS Deploy Now? (25:02)

• Nicole sees greater opportunities in less mainstream credit adjacencies and advanced co-investment strategies, moving beyond “regular way” direct lending.

6. Founding Square Nine Capital

Sabbatical & First Principles Thinking (25:54)

• Nicole’s year-long sabbatical was spent on “servant leadership,” contributing to her network and exploring where she could add the most value.
• Her firm focuses on the “valuation opaque” part of the credit market—complex, less trodden areas requiring private equity-style underwriting.
• “When that trifecta came together, that’s when we launched Square Nine. And it’s been great. It’s been everything I hoped for and more.” (26:11–30:54)

Team and Market Selection (30:54)

• Square Nine targets unsponsored or complex credit, requiring deep relationship skills and underwriting rigor.
• For Nicole, co-founder/partner selection and cultural fit were as important as market opportunity.

7. Bridging the Allocator and GP Divide

Biggest Disconnect (31:07)

• Allocators may underestimate the complexity of sourcing and executing deals; GPs may not grasp the internal constraints and mission-driven pressure on allocators.
• Nicole calls for greater empathy and transparency on both sides to foster deeper partnerships.

8. Lessons from Launching a Firm

Zero to One as a GP (33:42)

• Key success factors: track record, prior team cohesion, anchor capital/pre-launch commitments, and shared values.
• Cultural fit and team morale are critical considerations in such high-stress environments.

Antifragility of Joy (36:02)

• Enjoyment and camaraderie are not luxuries but essential to sustainable, resilient firm building.
• “If you actually like what you’re doing... it’s about how do I play more and how do I hit the ball more?” (36:02–36:42)

Underestimated Challenges (37:23)

• The weight of responsibility for team members’ careers is profound, often more than founders anticipate.

Empathy as Asset/Liability (38:33)

• Empathy makes for better investors and partners but must be balanced with tough decision-making and thick skin when facing setbacks.
• “If you don’t have expectations, you can’t be disappointed.” (39:53)

9. Legacy and Purpose

Building a Meaningful Legacy (41:42)

• Nicole’s motivation is rooted in delivering positive retirement outcomes for beneficiaries, striving to make a direct societal impact through her investment leadership.
• “I want to be able to look back and say I moved the needle on things that were needle moving for people who needed that.” (41:51)

Notable Quotes & Moments

• On Mission-Driven Investing:
  “I really have always just been very mission driven... knowing that it's bettering or giving folks a retirement with dignity.” (00:15)

• On TPA Culture:
  “Let's think like asset owners, not asset allocators... Allocators feels very passive.” (06:10)

• On Board Partnerships:
  "You have to start there. You have to join arms and start there." (12:37)

• On Co-Investment:
  “Let's not be in a position where we're not able to give a quick no. Those are as important as delivering yeses.” (16:01)

• On Empathy in Investing:
  “If you don’t have expectations, you can’t be disappointed.” (39:53)

• On Joy and Legacy:
  “For me, it's going to be as much about the people that I built the firm with as much as what we were doing with the firm.” (37:01)

  “I want to be able to look back and say that I moved the needle on things that were needle moving for people who needed that.” (41:51)

Key Timestamps for Important Segments

• Motivation & Mission: 00:15–01:19
• Implementing TPA & Cultural Change: 01:43–07:10
• Incentives & Structure: 07:23–10:43
• Building Board Trust: 12:09–15:44
• Private Equity and GP Partnerships: 16:01–19:40
• ESG, Diversity, and Culture: 20:50–21:55
• Structural Alpha and Co-Investment: 21:55–24:34
• Where to Allocate Today: 25:02–25:54
• Launching Square Nine Capital: 25:54–30:54
• Allocator & GP Disconnect: 31:07–33:26
• Culture, Joy, and Leadership: 36:02–37:23
• Empathy as Advantage: 38:33–41:42
• Legacy: 41:42–43:06

Final Thoughts

Nicole’s episode is a “masterclass” (as David puts it) on institutional investing at scale, driving transformation within immense organizations, and translating those experiences to entrepreneurial ventures. Her emphasis on mission, empathy, collaboration, and cultural alignment is woven throughout, offering useful lessons for both GPs and LPs seeking to succeed and leave lasting impact in today’s complex investment landscape.