SACRAMENTO, Calif. -- Staff for the $143 billion California Public Employees' Retirement System is recommending approval of a $50 million allocation to FirstCorp Capital Fund IV.
The fund will invest in buyouts of middle to large growth companies in South Africa. An alternative investment consultant for CalPERS, Hamilton Lane, also is recommending the investment.
Separately, the staff was seeking board approval to review 16 venture capital firms as potential finalists to help the retirement system establish a venture capital vehicle, a new concept for CalPERS. Finalists are expected to be chosen Sept. 30.
The venture capital vehicle will help CalPERS increase its exposure to venture capital funds and direct venture capital investments. CalPERS previously approved allocating up to $350 million to one or more venture capital vehicles. A final selection is expected Oct. 22.
Firms in the running: Atrium Capital; Crescent Investment Group; Crossroads Group; Grove Street Advisors; Halo Capital; Integra Management Group; Tom Judge; Pacific Corporate Group; Pantheon Ventures; Paramount Capital Management; Pinnacle Ventures; R G G Capital; Scudder Kemper Investments; Sovereign Financial Services; Symmetry Advisors; and Symphony Asset Management.
CalPERS staff and Allan Emkin, a principal with consulting firm Pension Consulting Alliance, will pick the finalists.
Turbulence brings terminations at Arkansas public fund
LITTLE ROCK, Ark. -- The Arkansas Public Employees Retirement System terminated four managers in an effort to streamline its international equities lineup, said Bill Van Cleve, executive director of the $3.5 billion fund.
The decision is a result of the turbulence in international markets, Mr. Van Cleve said.
The terminated managers are BEA Associates, Nomura, Bankers Trust and UBS.
The four managers ran a total of $140 million. The terminations leave the fund with two international managers. American Express Asset Management and Brinson Partners, both EAFE managers for the system, each will receive approximately half of the $140 million. The two managers previously ran a combined total of $182 million in foreign equities, he said.
"It wasn't a performance thing," Mr. Van Cleve said.
Callan Associates assisted.
Texas Teachers contemplating changes in foreign stocks
AUSTIN, Texas -- The Teacher Retirement System of Texas is considering changing its international equities allocation to 80% active and 20% passive, said Jim Hille, investment officer, international equities.
The $70 billion fund's current international equity accounts are 50% active and 50% passive.
In the past few years, the system has had "positive alpha with the active strategy," Mr. Hille said. If approved at October's board meeting, the change would take a year, Mr. Hille said.
The fund has $5.6 billion in international equities and runs the money in-house, with a target of close to $7 billion or 10% of the total fund, Mr. Hille said. Future additions would come from cash, he said.
Merced County narrows list for overseas equities
MERCED, Calif. -- The Merced County Employees' Retirement Association picked five finalists to fill an opening for an international equity manager, said Bill Smith, plan administrator. The manager would run up to 6% of the $270 million fund's assets.
This would be the fund's first international equity manager, Mr. Smith said. Finalists will be interviewed at the fund's next board meeting, Oct. 8., and a decision should follow immediately. Mr. Smith declined to name finalists.
The allocation will come from reduction in fixed income, Mr. Smith said.
Mississippi consultant search coming to a close
JACKSON, Miss. -- The Mississippi Public Employees' Retirement System is narrowing its search for a full retainer consultant, said Frank Ready, executive director of the $13.8 billion fund.
A final decision is expected by November.
The search was prompted by the expiration of BARRA RogersCasey's contract; BARRA RogersCasey is rebidding, Mr. Ready said.
House subcommittee names PBGC trustee
WASHINGTON -- The House District of Columbia subcommittee passed a bill allowing the U.S. Treasury Secretary to name the PBGC as trustee of the bulk of the District of Columbia Retirement Board's $4.95 billion in assets the federal government will take over under last year's District of Columbia bailout law.
The House legislation amending last year's law allows the secretary to pick a federal agency to act as trustee of the pension assets.
Under the Treasury Department's plan, the Pension Benefit Guaranty Corp. would then consider subcontracting investment management services of those assets to the retirement board, according to a letter by Gary Gensler, Assistant Treasury Secretary for Financial Markets, to Raymond Sneed, president of the DC Fire Fighters Association.
The Aug. 13 letter, made public recently, was in response to a request made by Mr. Sneed, as well as other representatives of district employee groups, to name the DCRB trustee for those funds.
Mr. Gensler's letter said the Treasury Department hoped lawmakers would pass the amendments before the end of this legislative session next month. Treasury officials declined to comment on the legislation.
The District of Columbia Retirement Reform Technical Corrections Act also would let the new trustee reimburse the District of Columbia government for fees and expenses incurred in managing the pension fund assets in the interim period.
Moreover, the legislation clarifies the DCRB will keep interest earned on its share of the assets it will retain after the federal government separates the assets it will take over.
Bank of New York subsidiary to buy Alpha Management
NEW YORK -- A Bank of New York subsidiary signed a definitive agreement to buy Alpha Management, the directed brokerage arm of Callan Associates. Terms of the deal were not disclosed.