Balancing $5.7T in Active and Passive Management with Lori Heinel

**Lori Heinel** (0:02)
Bloomberg Audio Studios, podcasts, radio, news.

**Barry Ritholtz** (0:08)
This week on the podcast, another banger, Lori Heinel is Executive Vice President and Global Chief Investment Officer at State Street Investment Management. She oversees $5.7 trillion in assets, and that's as of the end of 2025 It's obviously, market has appreciated since then. She oversees index funds, ETFs, active strategies, alternatives, multi-asset solutions, and really drives an incredible organization. I thought this conversation was fascinating, and I think you will also with no further ado, my interview with State Street's Lori Heinel.
Lori Heinel, welcome to Bloomberg.

**Lori Heinel** (1:00)
Thanks for having me.

**Barry Ritholtz** (1:02)
So let's start out with your early career and your academic background. You study religion at Princeton before getting your MBA at Carnegie Mellon.
What was the career plan with religious studies?

**Lori Heinel** (1:17)
Well, that's a long story, but I'll try to keep it short.
Bottom line is I went to Princeton because I wanted to get more of a liberal arts education. And what I realized pretty quickly is it didn't really matter what I majored in. I could major in economics, I could major in history, and I happened to take a religious studies course, which I just absolutely adored. And from a personal standpoint, I had a number of people in my family who were incredibly staunch practicing Catholics or other kinds of Christian religions. And they would do things that to me were quite odd at times. And so I thought from a personal perspective, it would be an interesting way to get more insight into what was going on with some of these family members.
So short answer is that I decided to pursue that as a academic undertaking and then I got to a place where I needed to think about a career. And my first thought was, well, geez, maybe I'll go to law school. Well, then I realized I needed to make some money. So my second thought was, well, geez, there's this analyst program thing that they have on Wall Street. Surely, they recruit at fine institutions like Princeton. And lo and behold, that catapulted me into what became a really long career in finance by just moving from an institution like Princeton into an analyst program.

**Barry Ritholtz** (2:34)
So let's move forward. You started Credit Suisse First Boston, where you ran equity and fixed income sales.
Then you ended up working on with trading at Parker Hunter in Pittsburgh. Am I getting the...

**Lori Heinel** (2:48)
Well, I didn't start by running anything. So I started out as a two-year grunt, right? I think most of your listeners know what these analyst programs look like. I was effectively in investment banking for public finance. So we worked with hospitals, airports, municipal authorities, but I did all the kind of grunt work, if you will, all the numbers crunching behind the scenes and helping to run the deal models and things of that nature. And I just found that fascinating. I thought it was really amazing to connect both what's going on in the world, with how finance supports that.
And so I did that for a couple of years. And then at the end of the two-year program, you're typically expected to go back to business school. Well, I still needed to make money because I had student loans to pay off. So I decided I wanted to stay. And that led me to an opportunity on the trading desk at First Boston, which really was an incredible opportunity because that was my first real introduction to markets.

**Barry Ritholtz** (3:41)
So what did working on the trading floor teach you about markets?

**Lori Heinel** (3:46)
So many things. I think the first and most important thing is I was there during the 87 Black Monday crash and I happened to be working in fixed income. So it was a really interesting day because of course, at that time, the First Boston trading floor was on two different levels. So you had all the fixed income was on one level, all the equities was on a different level. And we went dead silent in the first part of the day. And suddenly people were starting to realize what was happening, the market crashing, you know, 20-plus percent over the course of a day, which of course today we've got calibrators that don't let that happen anymore. But then all of a sudden towards the end of the day, things on the fixed income market started going crazy because now you had the Fed coming out, Alan Greenspan saying, you know, we're going to go ahead and provide liquidity. We're going to make sure that there's active engagement to forestall any further recessions or other things that might be caused by this kind of major crash. So I guess the first lesson I learned was that there are winners and there are losers in every market event. And it's better to be on the winning side. So I happened to be at that time on the bond side, which was the big winner that day.