Searches and Hires

CalPERS allocates $219 million to 2 managers, eyes revisions to policies

CalPERS invested or committed a total of $219 million to two managers, reports for the investment committee's March 19 meeting show.

The $349.3 billion California Public Employees' Retirement System, Sacramento, invested an additional $144 million to an existing high-yield fixed-income strategy managed by Nomura Corporate Research and Asset Management. The current size of the portfolio was not available. CalPERS added $30 million to the strategy earlier this year.

The pension plan also committed $75 million to private equity fund Clearlake Capital Partners V, managed by Clearlake Capital Group, according to a report for the meeting. CalPERS has invested with Clearlake in the past, including a $56.7 million commitment to Clearlake Capital Partners IV in 2015 and a $50 million commitment to Clearlake Capital Partners III in 2012.

Separately, at its March 19 meeting, the investment committee will review a revised real assets investment policy that establishes a minimum net asset value threshold at which limits by sector and geography apply for CalPERS' forestland portfolio. Investment sector and geography concentration limits would apply to the forestland portfolio when its NAV exceeds $3 billion. By comparison, the concentration limits apply to CalPERS' infrastructure portfolio when it exceeds $5 billion. CalPERS has target allocations to forestland and infrastructure of 1% each. CalPERS had 1.1% invested in infrastructure and 0.5% invested in forestland as of Jan. 31.

The investment committee on March 19 is also expected to discuss possible revisions to its governance and sustainability principles that could include adding that companies should disclose the ratio of CEO compensation to the median annual total compensation of all other employees as companies are required to do by the Dodd-Frank Act; that companies should identify and manage material environmental risks and opportunities; and that companies should have a way of recapturing compensation paid to executives during periods when they were engaged in fraudulent activity, inadequate oversight, misconduct or gross negligence.

Separately, in response to a request by California Treasurer John Chiang, CalPERS officials identified five companies in which it is invested that either had sold assault weapons banned for sale in California or accessories that can accelerate a semi-automatic rifle's rate of fire. They are Big 5 Sporting Goods, Dick's Sporting Goods, Kroger, Walmart and Sportsman's Warehouse.

In March, Big 5 officials said they stopped selling assault weapons in 2016 and had no current inventory, has never sold accessories that increase the rate of fire and does not sell hand guns. Dick's Sporting Goods in February committed to discontinue selling assault-style rifles, any firearm to individuals under 21 years and high capacity magazines. Dick's has never sold bump stocks. Dick's Sporting Goods is also calling for regulations banning assault-style firearms, high-capacity magazines and bump stocks. The company is asking for a comprehensive database of those banned from buying firearms for universal background checks and a closure of the private gun sales and gun show loophole that waives background checks.

Kroger announced on March 1 that it would no longer sell assault weapons in any of its stores nor accept special orders for assault weapons and will no longer sell any firearm or ammunition in its stores to anyone younger than 21 years old. Kroger does not sell high-capacity magazines. Walmart has not sold assault weapons since 2015 and only sells handguns in Alaska. It does not sell bump stocks and as of Feb. 28 raised the minimum age to buy firearms and ammunition to 21 years old. Sportsman's Warehouse executives have agreed to discuss the matter with CalPERS officials.