CalPERS has decided not to provide additional funding to Progress Putnam Lovell, a joint venture through which the $147 billion pension fund provides venture capital and investment monies to emerging managers. The program already has $1 billion in assets. Causes for the funding freeze are recent personnel departures at Progress Investment Management, one of three companies comprising the joint venture, and Progress’ recent sale to FleetBoston Financial. Clayton Jue recently was replaced as Progress Investment chief investment officer by Donna Gilding, former CIO for the $38 billion New York City Employees’ Retirement System.
Meanwhile, staff at the California Public Employees’ Retirement System, Sacramento, may allow its manager development program to invest in firms with less than $2 billion in assets under management; the current cap is $1 billion. And staff is pondering whether CalPERS should co-invest with outside program managers Progress and Strategic Investment Management. If such changes are adopted by the board, Arrowstreet Capital could be a beneficiary: the manager has been CalPERS’ best performing international equity manager during the 17 months it has been in the program, beating its benchmark by 5.85 percentage points on an annualized basis.
Separately, CalPERS’ investment committee approved a targeted search for a manager to run $4 billion in domestic growth equities. Current managers are: Brown Capital, Geewax Terker, Goldman Sachs, Putnam and Oak Associates. Parameters of the search are not known yet, though existing managers usually are able to bid.
