Carol McFate

Chief Investment Officer


As Chief Investment Officer for Xerox, Carol McFate manages an impressive list of responsibilities. She oversees the investment of Xerox retirement assets in North America, including Canada, for both defined benefit and defined contribution plans, and she recently became a trustee for the Xerox Limited U.K. Pension Scheme. “This is a pension plan, although the nomenclature in the UK is a bit different,” McFate explains. “It’s a relatively new responsibility and a rather interesting one, as the governance and management of pension assets are structured differently than in the U.S.”

McFate works with a team of seven, six more than she had when she arrived at Xerox to reverse an investment management outsourcing executed in 2001-2002 when the company was facing financial challenges.  These retirement assets were moved in 2002 to a third-party asset manager who shared fiduciary responsibility with an internal investment committee.

Earlier this fall, we sat down to chat about her professional journey thus far and what’s coming up next on the horizon.


Building skills and experience


Prior to our interview, McFate cautioned me that she has taken a less traditional perspective on her career than most, veering from a strictly vertical path to move across different areas of finance and investment management to round out her skill and experience sets. Eager to learn more, I asked her to dive right into her story.

“My career path was shaped by opportunity, mistakes, and making a conscious decision to have a more varied set of experiences.  Some individuals at a young age have very clear goals regarding what professional role they want to be in and in what timeframe.  I rarely thought that way.   When I joined XL Capital, my objective was to build a global treasury organization, like I built at AIG but on a smaller scale, as a stepping stone to becoming CFO.  We made great progress on the first part of that objective, including being respected by senior management and the Board of Directors.  During my time at XL, the role of CFO changed, largely driven by Sarbanes Oxley, such that the CFO role was less appealing to me.  When I was thinking of moving on, I opted to move into investment management – building on my Prudential experience – to tackle a reverse outsourcing of Xerox’s US retirement assets, building a risk controlled diversified portfolio and assembling an investment management team from the ground up.  I drew from my prior experience — finance, risk management and treasury management – to execute, with my team, a very successful reverse outsourcing.  Some in the industry thought our task was impossible, but we accomplished it despite the added challenge of making these changes during the financial crisis.

“Nearly every professional role I have had was either a turnaround, a clean-up, or a start-up.  With each new role, I took my foundational skill set in finance and investment management to move into roles where that skill set was deepened, by moving up, or broadened, by moving from insurance finance to management of pension plan assets in run-off similar to a run-off life insurance company.  Over time, I came to think of my cumulative career experiences as a quiver, with each new role representing a new arrow (skill set) added to my quiver.

“Having fixed many problems across a wide range of roles, frequently under challenging circumstances, I developed a deep and broad sense of business judgment that had much more wide-ranging applications than I could have imagined when I started my career.  At times, it has been a wild ride, but it has rarely, if ever, been boring.  I also believe it prepared me well for the next and last stop of my career, a portfolio of a few board seats.”


Shunning the easy route


Having sketched the outline of McFate’s journey to CIO at Xerox, I wanted to look a bit more closely at the abilities and experience that had enabled her to rise to this position. What skills do you think were most relevant to your success, I asked, and how did you chart your course?

“I’ve been lucky in my career, but I’ve also developed the resiliency to adapt when circumstances took a sharp turn that I hadn’t anticipated. I’ve always been very curious and interested in mastering one skill set and then moving on to the next one.  Most people avoid change and being a change agent – I relish it.  Most of my career has been figuring out how to solve a problem and then getting it done.   I have never been fearful of the unknown when taking on new challenges.  Granted, you need to recognize your own limitations and bring in others with complementary skills to balance what you contribute, but if a new role looked interesting and broadened my skill set or experience base, I was not afraid of jumping into the deep end.  In fact, I have done so repeatedly, whether realizing that at the time or not.  But there is one thing in my background that laid the foundation for how I have approached new challenges.

“Many people ask if I have had a mentor. I’ve never had one formally, although informally a number of people have acted in that capacity.  But from a long- term perspective, I had something more valuable than a mentor, a mother. My mother was 38 years old when I was born, which was highly unusual at that time, and she already had two sons, ages 10 and 12. She was raised during a time when women were brought up to believe that their highest aspiration was to be a good wife and mother. My father died when I was seven months old and unfortunately, society suppressed my mother’s potential.  How she was treated caused her to raise me very differently. I was never told, ‘Girls can’t do this,’ or ‘Girls can’t do that.’ If I wanted to attempt something, she was always supportive, cheering me on. Her attitude gave me a sense of confidence and the courage to chart my career course, regardless of what was typical for a woman. That was an extraordinary gift.

“My husband was another great gift, but I didn’t meet him until I was in my forties when I was working for AIG. He’s very self-confident, and he encourages me to do whatever I think could be interesting and, ideally, make me happy. He’s my biggest cheerleader now, but he also keeps me in check. I keep him in check, too, but that’s what a good partnership is all about.

“When I was in college, there was a professor – not my advisor – who pushed me to go to HBS, which I might not have done given my background and analytical nature. I was more predisposed to go to Chicago, but my advisor stepped in and said that while Chicago might be a more comfortable place, Harvard was what I needed. He was right. The experience was a stretch; it made me question what I knew more than I ever had before. It forced me to be more thoughtful about how I approach a problem, craft a solution and go about trying to execute it. That said, in business as in life, the primary way you learn is by doing. Getting an opportunity. Taking responsibility. Having a project. Completing it. Managing a team and hopefully developing them along the way; you make mistakes, but you learn from those mistakes.  Making mistakes is the most valuable lesson in life in many respects, so long as you take them in and learn from them.”

McFate’s talk of mistakes offered a perfect segue into my next question. Can you tell me about a challenge you’ve faced, either personally or professionally, and how you’ve solved it?

“Almost every time I’ve changed jobs, I’ve jumped into the deep end, although I didn’t always realize it. I thrive on that. Being resourceful is a huge benefit and having a strong network is also very helpful. When I joined Xerox, I was taking responsibility for managing investment assets against a pension liability in a regulated environment when we were entering into some choppy markets.  I had a staff of one person who did not have an investment background, so I needed to learn fast, particularly as we were taking control of a large portfolio of defined contribution assets where the entire investment line-up needed to be completely revamped.  First, we hired an outside consultant to help us dimension the task and start making progress.  In addition, I became a member of a professional organization for corporate plan sponsor chief investment officers: CIEBA.  It’s comprised of roughly 100 of the largest plan sponsors in the country. These folks have been incredibly supportive – they helped me learn this business and several of them have become some of the best friends I’ve ever made in a professional setting – they’re incredibly smart and genuinely concerned about the retirement security of their plan’s participants. As fiduciaries, they look out for the best interest of the participants. They all take their work very seriously, as well they should; we also have great camaraderie within the group. We learn from each other – it’s a tremendous organization.  These individuals did more to help us find our way than they will ever know.” 


Pushing the envelope


I was intrigued by McFate’s broad-ranging experience and felt certain that her years in the field had yielded many great insights. What do you think are the most important things for women to know when they’re trying to move up the ladder or land that next big role or big raise?

  • Don’t fear failure. I think many women are afraid to ask for advancement, whether a promotion or a raise or another assignment.  Simply put, if you don’t ask, you don’t get. If you don’t continually stretch, you have no idea of your capabilities.  There will be times you will fail. Everybody does, but as I was told as a little girl, ‘Pick yourself up, dust yourself off and just keep going.’
  • This is not a popularity contest. If you’re driven and a woman, in all likelihood you’re going to be referred to with the ‘B’ word at some point. Get over it. I know that term has been leveled at me more than once, maybe worse. I often think the people who are using that label have no appreciation for how hard you’ve worked and the sacrifices you’ve made. It’s tough to move up in any organization – it’s competitive. Many people want these jobs, and they’re going to want to push you aside.  You just have to get used to it and keep trying. In the end, I’d rather be respected than liked.  Being liked is great, but it typically won’t help you achieve your professional goals.
  • Learn to work well with teams. I think it’s important to pick up the perspectives, insights and knowledge that other people have. You can learn from them, maybe more than they can learn from you –that’s something that I have had a few challenges learning.
  • Listen more acutely. Most of my life I have had to fight the urge to speak first in a group setting. Some of that was my innate competitiveness, but some of it was less constructive that it might have been. There’s a scene in the musical Hamilton in which Aaron Burr is first meeting Alexander Hamilton and he has this phrase in a song: ‘Talk less, smile more.’ This resonates with me and is something I remind myself when the urge to take the lead bubbles up.
  • Recognize that a successful career involves trade-offs and sacrifices. Everybody has to make choices. How you define success is up to you – it took me a long time to learn that. Some of my experiences have taken me in directions that I couldn’t have anticipated. If I had taken the straight vertical route, I wouldn’t possess nearly the breadth and depth of experience that I have across finance, investment management, and business in general, nor would I have the wide-ranging business judgement that I’ve built. Those trade-offs will hopefully enable to me to end my career on a few boards to share the benefit of my experience.
  • Your integrity is all you’ve got. Don’t waste it. You start making compromises and suddenly you’re chipping away at your integrity and your reputation.  When it’s gone, it’s gone.   Never forget that.

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