CalPERS and Barclays Global Investors failed to come to terms on fees for management of two domestic enhanced equity index strategies, said Kathleen Taylor, managing director of BGI's U.S. institutional business. CalPERS spokesman Brad Pacheco confirmed that the fund and BGI had failed to agree on fees.
BGI was one of 10 managers picked in June by the $178 billion California Public Employees' Retirement System, Sacramento, to run a combined $6 billion in U.S. enhanced equity index portfolios. Rosalind Hewsenian, managing director at consultant Wilshire Associates, had noted at the time that BGI's fees for its "alpha tilt" products were a concern.
To date, CalPERS has funded nearly $2.4 billion of the total allocation, and is considering speeding up the remaining investment, Christianna Wood, senior investment officer, told the CalPERS board on Monday. Originally, CalPERS had planned to invest only half of the total in the first year.
To date, six of the remaining nine managers have been funded: Western Asset Management, $505 million; Smith Breeden Associates, $501 million; INTECH, $354 million; Quantitative Management Associates and Franklin Portfolio Associates, $353 million each; and Atlantic Asset Management, $300 million. Managers not yet funded are Goldman Sachs Asset Management, PIMCO and State Street Global Advisors.
