CalPERS plans to cull 269 private equity managers to boost performance, oversight

Real Desrochers CalPERS
Real Desrochers

CalPERS wants to cut the number of private equity managers to less than a third of the 389 managers now participating in the $42 billion program.

Real Desrochers, senior investment officer, private equity, for the $277.3 billion California Public Employees' Retirement System, Sacramento, told the CalPERS investment committee Monday that a future goal is to reduce the number of managers to around 120.

Mr. Desrochers did not detail a timetable for the reductions.

In an interview, Mr. Desrochers said reducing the number of private equity managers is keeping with the private equity program's focus on managers with strong long-term performance. He said reducing the number of relationships would also enable to CalPERS to better monitor managers.

The number of managers and private equity funds has slightly decreased since Mr. Desrochers began a strategic plan in September 2011 to revamp the program. The number of managers has declined since the plan began to 389 from 398, while the number of private equity funds has gone down during that same period to 741 from 762, CalPERS statistics show.

The plan also included adding risk and investment review units to the private equity program and increasing investment staff to 58 currently from 28 in September 2011.