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ASSET OWNERS

CalPERS, CalSTRS outline diversity efforts at forum

Theodore Eliopoulos

As CalPERS reduces its number of external managers, it remains committed to racial and gender diversity among its managers, the pension fund's chief investment officer told a diversity forum Wednesday in Sacramento.

Theodore Eliopoulos said he anticipates that when CalPERS gets down to its goal of 100 outside managers, 15 of them will be part of a transition program. The program is designed to help promising managers, including women- and minority-owned firms, move from managing small stakes of CalPERS' portfolio to larger shares.

The $318.9 billion California Public Employees' Retirement System, Sacramento, is in the midst of a program to reduce its number of external managers to 100 from 300.

The forum was sponsored by CalPERS and the $202.8 billion California State Teachers' Retirement System, West Sacramento.

Mr. Eliopoulos announced in June 2016 that CalPERS would make up to $7 billion in new commitments to its transition program through 2020.

He was unable to provide data as to how much money had been distributed so far to transition managers or how many had been hired under the new program.

But CalPERS is making progress in reducing its number of external managers.

CalPERS is now down to 159 external managers, said Megan White, a spokeswoman for the retirement system, in an email.

Mr. Eliopoulos was quick to point out at the forum that California law prevents preferential treatment for employment to woman or minorities, which he said is why the transition program is not specifically targeted to them.

Both Mr. Eliopoulos and CalSTRS Chief Investment Officer Christopher Ailman said efforts to diversify their external manager lineup and their own investment offices are ongoing.

CalSTRS has been more successful than CalPERS in terms of hiring women in senior leadership positions.

Mr. Ailman said at the forum that 62% of senior leadership of the system's investment office is made up of women. CalPERS statistics provided by Ms. White show that 20% of senior leadership in its investment office are women.