CalPERS' staff proposed that some of the $133 billion system's U.S. real estate managers be permitted to invest in Canada and Mexico. The investment committee of the California Public Employees' Retirement System, Sacramento, will consider the proposal on Dec. 16. The staff notes that two of CalPERS' current core managers, LaSalle and Hines, already invest in those countries. Any foreign transactions would be limited. Canadian core properties are on a different cycle than those in the United States, while Mexican properties offer strong growth prospects, a staff memo explained.
In addition, CalPERS will consider elevating First Washington Realty to a partner in the system's $900 million Eastern U.S. core retail shopping center portfolio. The firm has been interim manager for the portfolio since September 2001. The new arrangement would enable First Washington to co-invest with CalPERS, aligning the two institutions' interests.
Separately, the staff and consultant Wilshire Associates recommended that CalPERS invest $100 million in the Hermes European Focus Fund, a corporate governance fund investing in continental European companies. The fund has 360 million euros in commitments and a target size of 2 billion euros.
In addition, CalPERS hired Tremblant Partners, a long-short fund investing in the consumer and retail sectors, to run $25 million initially. Tremblant is the ninth fund in CalPERS' hedge fund program.