CalPERS will switch to daily performance monitoring from monthly reporting and plans to search for master custody services; the contract of current custodian State Street Bank expires June 30, 2006.
Under an amendment to the current contract, State Street will move the $182.8 billion pension fund to daily reporting on July 1. "The move to daily performance reporting will provide a contemporary platform to support enhanced portfolio management, compliance, risk and analytical processes needed to make informed decisions about the fund," according to a staff memo to the CalPERS board. State Street will not charge an additional fee for the transition to daily reporting, the memo said; for the fiscal year ended June 30, State Street is being paid $9,955,788. Selection of a new custodian would involve significant transition costs, the memo added.
The California Public Employees' Retirement System, Sacramento, plans to issue the master custody RFP on Aug. 1, with a selection slated for Dec. 12.
Separately, CalPERS recommended renewing contracts of its four external high-yield bond managers for one year each: Nomura, which runs a $327 million portfolio; PIMCO, $323 million; Highland Capital, $322 million; and ING Ghent, $306 million. The investment committee will vote on the contracts at its May 16 meeting.
In addition, a CalPERS consultant has written to the Sri Lanka ambassador, warning that the country might fall off the pension fund's list of eligible emerging markets under a new scoring methodology being adopted for next year's rankings. Consultant Wilshire Associates would like to begin working with embassy officials on areas such as settlement proficiency and transactions costs that could be improved, Rosalind Hewsenian, a managing director at Wilshire, wrote Ambassador Devinda Subasinghe on April 28.