Skip to main content
MENU
Subscribe
  • Sign Up Free
  • LOGIN
  • Subscribe
  • Topics
    • Alternatives
    • Consultants
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Regulation
    • SECURE 2.0
    • Special Reports
    • Washington
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • ESG Investing | Industry Brief
    • Innovation in ESG Investing
    • 2023 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • The Plan Sponsor's Guide to Retirement Income
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2023 Defined Contribution East Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Research Center
    • The P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2023 Canadian Pension Risk Strategies
    • 2023 Retirement Income
Breadcrumb
  1. Home
  2. ALTERNATIVES
July 16, 2019 02:06 PM

CalPERS shifts focus to managed accounts for infrastructure

Arleen Jacobius
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Getty Images/iStockphoto

    CalPERS officials are opting to invest primarily in separately managed accounts rather than direct investments and commingled funds in infrastructure, said Paul Mouchakkaa, management investment director at the $370.2 billion pension plan, in an interview Monday at its off-site meeting in Santa Rosa, Calif.

    In fiscal year 2019, the California Public Employees' Retirement System, Sacramento, made commitments to two separate accounts, Mr. Mouchakkaa told the board at its meeting. One is a $1 billion commitment to GIP Strategic Alliance SMA I, a separately managed account managed by Global Infrastructure Partners, which CalPERS revealed in June. The second is a separately managed account with QIC. Mr. Mouchakkaa declined to provide details because the investment has not yet been reported officially.

    While CalPERS has made direct investments in the past including an investment in Gatwick Airport in London with Global Infrastructure Partners and an investment as part of a consortium that invested in the Port of Melbourne with manager QIC, Mr. Mouchakkaa said that separately managed accounts are now preferred. The majority of CalPERS' infrastructure assets are in separately managed accounts, he said.

    During the meeting, Mr. Mouchakkaa explained that when CalPERS initially started moving away from commingled fund in favor of pursuing direct investments, CalPERS found itself competing with infrastructure managers such as QIC and GIP, he said. Instead, CalPERS has determined that the best approach is to access infrastructure with separately managed accounts.

    In Chief Investment Officer Ben Meng's presentation on his first 180 days, he stressed how he spent the time getting to know CEO Marcie Frost and her executive team, the investment office and the board's strategic priorities. He applauded the board's lowering of the discount rate to 7% from 7.5% and the new asset allocation, both actions occurred before Mr. Meng rejoined CalPERS as CIO in January. The board decided to lower its discount rate over a three-year period in 2016 and changed its asset allocation in 2017. Former CIO Theodore "Ted" Eliopoulos was at the helm for both of those changes.

    He told the board that CalPERS took a big hit during the global financial crisis and it is still recovering from those losses. However, with the risks of another drawdown always comes with investment opportunities.

    He said that CalPERS houses a full-blown investment management function within a civil-service context. Mr. Meng noted that he wants to ensure that the investment office is 100% focused on investment performance and focus on measures that will improve CalPERS' funded status.

    And he said that he has been impressed how many of professionals in CalPERS' investment office class are willing to "get into one boat and row together" focusing on the entire fund rather than their own asset classes.

    Mr. Meng applauded the board for making changes so that the CIO reports only to the CEO, who holds the CIO accountable.

    "It allows me to focus on investment performance," Mr. Meng said.

    To improve CalPERS' funded status, which is currently estimated at 70%, CalPERS staff will "have to pull together," Mr. Meng said. "It will require team work."

    Board members had no questions for Mr. Meng regarding his assessment of his first 180 days.




    Related Articles
    CalPERS commits $1.5 billion to 2 infrastructure funds
    Institutions piling into infrastructure across North America
    CalPERS approves boost in non-U.S. infrastructure
    Recommended for You
    Macquarie adds 2 to private credit team
    Photo of T. Rowe Price's Doug Keller
    T. Rowe Price names head of U.S. intermediaries alternatives sales
    TEASERS_101119999_AR_0_LMOOUWRLGNDI.jpg
    HPS closes second senior secured direct lending fund with $7.3 billion
    Quest for Quality Amid Market Turmoil
    Sponsored Content: Quest for Quality Amid Market Turmoil

    Reader Poll

    May 1, 2023
     
    SEE MORE POLLS >
    Sponsored
    White Papers
    Middle market credit: We’re gonna need a bigger boat
    Alternative Credit: Differences and Opportunities in CLOs and Credit Risk Shari…
    Fixed Income is Attractive, but Beware of "Fake" Yield
    Counting on a Crisis: A Catalyst for Investment Innovation?
    A Strategic Allocator's Guide to Productivity and Profits
    Research for Institutional Money Management
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    December 12, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Custom Content
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Regulation
      • SECURE 2.0
      • Special Reports
      • Washington
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • ESG Investing | Industry Brief
      • Innovation in ESG Investing
      • 2023 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • The Plan Sponsor's Guide to Retirement Income
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2023 Defined Contribution East Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Research Center
      • The P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2023 Canadian Pension Risk Strategies
      • 2023 Retirement Income