CalPERS’ staff in November will propose allocating $1 billion to hedge funds through a manager-of-managers approach to be modeled on the fund’s venture capital vehicle, California Emerging Ventures. An outside firm will be picked, through competitive bidding, to advise on selection of hedge funds. Sacramento-based California Public Employees’ Retirement System, with $177 billion in assets, will focus on conservative and experienced managers.
The $1 billion allocation — a far cry from press reports last year saying CalPERS would invest up to $14 billion in hedge funds — will be in addition to an allocation of up to $300 million already awarded to Pivotal Partners and $125 million committed to The Abacus Fund.
In addition, the CalPERS board on Monday will vote on the selection of CB Richard Ellis Investors as manager of a $500 million real estate program that emphasizes the convergence of technology and real estate. The program is a joint project between CalPERS’ real estate and alternative investment staffs.
Staff also recommended hiring Lend Lease Real Estate Investors as manager of a $125 million senior housing commitment, replacing Shattuck Hammond Partners because of conflict of interest and organizational changes. Shattuck Hammond had been picked in June to manage the portfolio, but now the deal is off because the firm’s parent, Pricewaterhouse-Coopers, serves as the CalPERS board auditor. Also, the real estate firm is now for sale, and PwC has withdrawn its co-investment commitment of $6.25 million.
