Sports brought Jane Buchan to Orange County from New York City, and the competitive drive honed on the playing fields has continued with her rise into the ranks of the most powerful women in the world of hedge funds.
Buchan is cofounder and chief executive of Irvine-based global fund-of-hedge-funds manager Pacific Alternative Asset Management Co.
The institutional investment firm—Paamco for short—manages and advises on more than $16 billion in assets for some of the world’s biggest pension plans, as well as for foundations, endowments and government-owned investment funds.
Buchan is chairwoman of the board of the Amherst, Mass-based Chartered Alternative Investment Analyst Association and has been named several times to the 50 Women in Hedge Funds list published by the Hedge Fund Journal and Ernst & Young. She also received the 100 Women in Hedge Funds’ 2014 North American Industry Leadership Award.
Her latest honor came at the 2015 Women in Business Awards presented by the Business Journal on June 23 at Hotel Irvine.
Buchan’s duties as chief executive include oversight of Paamco’s overall strategy, with the firm operating as a fund of hedge funds by engaging fund managers to invest client assets within a strategic framework.
Paamco typically works with about 50 fund managers at any given time. It also has about 140 employees in jobs ranging from analysis to compliance management to administration spread over offices here and in London and Singapore. It was also part of the Business Journal’s Best Places to Work list in 2013.
Buchan, who grew up in Portland as the daughter of two professors of medicine, said she didn’t know what sort of career she wanted to pursue after college—even as she wrote a senior paper at Yale University on the topic of merger arbitrage to wrap up her studies in economics.
Her interest and skills in all things quantitative led her to J.P. Morgan Investment Management in New York, where she worked as a quantitative fixed-income analyst after graduating from Yale in 1986.
“I really liked it, but what happened was, I got an offer—it was in February following my graduation—to move out to California to train and to try out for the Olympics,” said Buchan, who had become a nationally recognized name in the high jump at Yale and held an Ivy League record. “They thought I might have a shot. I didn’t think I was going to make it, but even just to compete at this level was kind of cool.”
Buchan’s boss at the time, a former professor, told her, “I love finance, but there’s always time for that. Why don’t you go out for the tryouts?”
“So he gave me a two-year leave of absence,” Buchan said. “That’s how I moved to Southern California. I got to Orange County via a New York City money manager.”
Buchan kept a full-time job at fund-of-funds manager Collins Associates Inc. in Newport Beach while training for the Olympics.
“I’d get up every morning, go to work from 6 to 2, and when 2 o’clock hit, I’d be out the door down to UCI or Cal State Long Beach, wherever the training was, and I’d turn into an athlete,” she recalled. “So that was my Olympics trials in 1988. I didn’t make the team, but it was cool to make it to the trials.”
Buchan went on to Harvard University, where she earned a master’s and a doctorate in business economics. She also taught finance at the Amos Tuck School of Business at Dartmouth University.
“I was having a really good time teaching, but I had never quite given up the real world,” she said.
She continued to consult for Collins.
Buchan then left teaching and moved back to Orange County in 1999, a first-time-to-OC for her husband, Jim Driscoll—a track and field teammate at Yale who had gone on to compete for the U.S. at the international level, winning the gold medal in the hammer throw at the 1991 Pan American Games.
“I realized I wanted to do my own thing rather than work for somebody else.”
She left Collins with a few others, and several clients urged Buchan and three colleagues to continue managing their money, leading the quartet to found Paamco in 2000.
The three other cofounders were James Berens and Judith Posnikoff, who serve as managing directors, and Bill Knight, who has since retired.
“At first, we didn’t know what we wanted to do,” Buchan said. “Almost two years into it, we finally had a chance to breathe. We decided we wanted to build a major world-class investment firm in the fund-of-hedge-funds space. We contemplated briefly moving to Los Angeles, asking, ‘Can we really do this in Orange County?’ And I think we thought about it for a week and decided that nobody really wanted to move.”
The firm has since grown not only its assets and global reach—it opened its London office in 2003 and added Singapore in 2006—but also its reputation as an early adopter of best practices standards. Paamco has invested in technology that allows hedge fund managers to be transparent about investments, with regular monitoring for risk management.
“We’ve made a huge, huge investment in systems and technology,” Buchan said. “And that is what enables us to invest in early-stage managers.”
“Emerging managers,” she said, are part of an overall approach crafted with the firm’s “risk budget” in mind.
Paamco’s focus on monitoring performance is a key to striking a balance between reaping gains through relationships with emerging hedge funds and the risks inherent in the younger enterprises.
“Keeping controls and seeing what’s going on, we can take as much risk as possible into the actual investment strategy and not into operations,” Buchan said.
Buchan is a trustee of Reed College in Portland and of the University of California-Irvine Foundation. She and Driscoll are big supporters of local performing arts and education. The couple gave $5 million to the Segerstrom Center for the Arts in 2007, among other gifts.
“It’s neat being in the community,” Buchan said and the ties extend to her firm, too.
“We could be in other places but I think it’s important to talk about how OC’s got a lot going for it. This is a great place to do business.”