SACRAMENTO, Calif. — CalPERS is looking inward in an effort to diversify its $30 billion passive international equity portfolio.
The $182.9 billion California Public Employees' Retirement System's investment committee decided last week to move up to $15 billion of the portfolio — currently managed solely by State Street Global Advisors, Boston — to internal management in a similar style.
The SSgA portfolio is a customized FTSE All-World ex-U.S. index fund. The assets will be moved once additional staff members — including an investment officer — are hired and internal testing of its index is complete, according to Brad Pacheco, CalPERS spokesman.
A report from the investment staff explained: "Staff's interest in bringing a portion of the FTSE international index fund in-house is based on reducing CalPERS' dependence upon any individual manager and on the notion that globalizing internal equity management appears to be a logical next step for CalPERS, both in terms of broadening in-house capabilities and in terms of according international equity a treatment more consistent with that employed in domestic equity management."
The move also would lay the foundation for CalPERS to eventually move those assets to internally managed active international strategies, according to the staff report.