David Gilbert, senior real estate investment officer for the $100 billion California Public Employees' Retirement System, Sacramento, proposed the fund set up ``management teams'' of real estate money management staffers who would work exclusively for the CalPERS portfolio on investment strategy decisions.
His proposal would fundamentally change the way CalPERS - and most other pension funds - use real estate money managers.
Mr. Gilbert told trustees at a real estate subcommittee meeting today that changes are needed to align managers' interests with the system's.
Under the proposal, the fund would allocate assets within distinct pools to support a dedicated manager team; pools would be allocated by property type and region.
Interests also would be aligned through incentive fees and co-investing.
Mr. Gilbert wants to combine the strengths in the structures of real estate advisers and operating companies like REITs.
His recommendations could come up for ap- proval today, but one trustee is asking that Mr. Gilbert first reply to comments on the proposal from CalPERS' current real estate advisers.
The board of trustees also might want to look at evaluations of the proposal from their general pension consultant before approving it.
