CalPERS plans to issue an RFP on April 29 for environmentally friendly public equity managers to run up to $500 million in combined assets. Staff of the $183.6 billion California Public Employees' Retirement System, Sacramento, recommends the system's board create "spring-fed pools" of both domestic equity and developed-markets managers. Finalists would go before the board in October, according to a staff memo. The recommendation will be considered by the CalPERS board April 18.
The allocation would be part of a "greenwave" initiative originally proposed by California Treasurer Phil Angeles. Under that program, CalPERS a year ago authorized funding separate accounts or mutual funds for a total allocation up to $500 million. On March 31, CalPERS staff invested $25 million in Barclays Global Investors' iShares KLD Select Social Index Fund. Staff said the exchange-traded fund, which applies a range of social and environmental ratings, is superior to mutual funds that were considered for the program's initial investment.
CalPERS staff recommended that environmental strategies have a minimum $100 million in assets under management, instead of the system's standard $500 million minimum, because environmental investing is a new area. Wilshire noted that its database has at least 29 strategies with minimum three-year track records that meet the $100 million criterion, but only nine strategies that would meet the $500 million threshold.