- Verizon’s longtime private equity head Michael O’Connor retired in June 2019 and was replaced by Stephen Blundin, formerly VP of Equities & Alternatives.
- At year-end 2018, Verizon’s defined benefit pension plan held $17.76 billion in assets, with about 17.4% (roughly $3.1 billion) in private equity.
- By year-end 2023, private equity holdings had dropped sharply to about $512 million out of roughly $13.5 billion in total plan investments.
- The leadership change coincided with a strategic cut to private equity exposure, likely to improve liquidity, manage risk, and rebalance alternatives.
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The transition in leadership—Michael O’Connor stepping down in mid-2019 and Stephen Blundin taking over as head of private equity—is a key turning point for the Verizon pension fund’s investment strategy. Blundin’s background in equities, hedge funds, and liquid alternatives suggests continuity in exposure to non-traditional assets, but potentially also a recalibration of risk in private equity holdings. [1]
In 2018, the fund allocated roughly 17.4% ($~3.1 billion out of $17.76 billion) to private equity, a relatively high and illiquid exposure given usual pension plan constraints. [1] However, the most recent reports (2023) show private equity holdings at $512 million, down significantly in dollar terms, though the broader pension fund size also varies. [2] This points to a sharp cut in private equity allocations over the four-year period. [2][3]
Part of this reallocation likely reflects shifting priorities: increasing emphasis on liquidity, liability hedging, diversification, and avoiding overexposure to asset classes sensitive to market cycles. The 2024 and 2025 disclosures confirm that private equity remains a component, but smaller in scale relative to its peak. [2][3]
Strategically, lowering the private equity stake lessens both potential upside and downside: private equity can boost returns but is less liquid, more opaque, and more volatile during market stress. The leadership change gave Verizon pension fund an opportunity to revisit private markets exposure, especially under rising interest rates and tightening capital markets post-2019.
Open questions remain: what internal benchmarks or return targets were missed that triggered the shift; whether the reduction was driven by performance, capital calls, or rebalancing; how Verizon’s funded status and regulatory or accounting pressures factored; and what the new target allocation to private equity and alternatives is under Blundin’s leadership.
Supporting Notes
- Michael O’Connor retired in June 2019 and was succeeded by Stephen Blundin, who had served since 2005 and was VP of Equities & Alternatives. [1]
- By December 31, 2018, Verizon’s defined benefit pension fund had $17.76 billion in assets, with about 17.4% allocated to private equity. [1]
- In 2019, private equity fair value holdings were about $737 million out of approximately $19.45 billion total pension plan investments. [2]
- By December 31, 2023, private equity holdings declined to about $512 million. [2]
- Pension plan assets at end-2023 had approximately $13.54 billion in fair value investments, of which private equity was $512 million plus other non-public assets. [3]
- The fund’s real estate holdings in 2023 were roughly $996 million, showing that other alternative asset classes remain, though their sizes also fluctuated. [2][3]
Sources
- [1] www.buyoutsinsider.com (Buyouts Insider) — August 1, 2019
- [2] www.sec.gov (SEC / Verizon) — 2023-12-31
- [3] www.sec.gov (SEC / Verizon) — 2023-12-31