SACRAMENTO, Calif. — CalPERS officials signaled they will make a major push into enhanced index equity strategies, allocating between $13.1 billion and $17.5 billion in the next year.
"We believe we can add tremendous value to the fund," Christianna Wood, the senior investment officer who oversees the fund's $87.5 billion global equities program, told the investment committee of the $138 billion California Public Employees' Retirement System, Sacramento.
Ms. Wood said she expects most of the enhanced index assets will be allocated to external money managers. Detailed proposals will be submitted to the board for approval during the next year. Currently, CalPERS invests only $646 million in enhanced in-dex strategies, all through internal management.
If adopted, the changes also would result in cutbacks in both pure passive and active equity strategies. Under the proposal, the range for passive equities would be trimmed to 50% to 65% of global equities from 50% to 75% now, while a combined category of active equities and CalPERS' dynamic completion fund would be cut to 15% to 20% from 28%.