Officials for the California Public Employees' Retirement System are considering establishment of a merchant bank. One aim behind the proposal would be to recruit West Coast public pension funds and an Australian fund as contributors to the bank and penetrate Asia's closely knit business community to make direct equity and other alternative investments that U.S. pension funds find difficult to do.
Charles Valdes, chairman of the fund's investment committee, said the merchant bank is in the conceptual stage. He said other proposals of somewhat similar breadth and scope also are being examined, but he declined to identify them.
The merchant bank idea and an ``Asia fund'' also were recently identified as a possibility by CIO Sheryl Pressler. A preliminary proposal calls for the merchant bank to be capitalized first by the fund with $500 million to $750 million.
