CalPERS staff today proposed adding three managers to a new enhanced index international equity pool and four managers to a new active international equity pool. The size of the funding has not been determined, said Brad Pacheco, spokesman.
Selected for the enhanced international equity pool were Barclays Global Investors, Baring Asset Management and JPMorgan Fleming Asset Management. Selected for the active non-U.S. equity pool were Alliance Capital's international strategic value and international large-cap growth strategies, PanAgora Asset Management, New Star Institutional Managers and The Boston Co. Asset Management.
Assets to fund the managers will come primarily from passively managed international equities, according to a staff memo to the board of the $183.6 billion California Public Employees' Retirement System, Sacramento. Additional assets may come from CalPERS' existing active international managers or from cash flow. State Street Global Advisors runs $30.6 billion in passively managed international equity assets for CalPERS, although the board voted in February to shift up to $15 billion of that sum to a new internally managed non-U.S. index fund, starting with an initial $5 billion allocation in May.
However, staff noted that only a limited group of managers can invest in both developed and emerging markets. Staff now believes that CalPERS might be better off creating separate pools for those categories, and is evaluating how this proposal fits with the manager pools now being established.