Trustees of the $80 billion California Public Employees' Retirement System will allow the fund's international equity managers to invest in China.
China joins the list of the fund's "category B" countries - such as Israel and South Africa - in which no more than 20% of the market value of a manager's portfolio may be invested.
Also, the board approved a staff recommendation that directly negotiated private equity investments are appropriate for the fund.
The staff intends to write a strategic plan for private equity investments with its consultants by August. It also intends to hire staff with deal-making expertise in the private equity area.
The pension fund has taken an increased interest in private equity; one of its possible deals is a $200 million investment in DreamWorks SKG, the multimedia collaboration of entertainment leaders Steven Spielberg, David Geffen and Jeffrey Katzenberg.
The pension fund also has decided against releasing requests for proposals for mainstream domestic equity managers and small emerging managers for now. The pension fund intends to analyze each existing equity manager and extend some or all contracts through December 1996. The managers manage $5.2 billion in domestic equities.
Also, the board decided to change domestic equity portfolio management for the California Legislators' Retirement System from an active strategy to an indexed strategy. The equity portfolio for the fund is $30 million. CalPERS' board oversees that fund.