CalPERS plans to search for international fixed-income managers.Currently, the $198.2 billion California Public Employees' Retirement System, Sacramento, has six managers running $5.3 billion in foreign bond assets for the fund: Baring, Bridgewater, Julius Baer, Rogge, Wellington and Western. CalPERS officials did not respond to requests for additional information by press time.
The fund next month also will propose allowing some of its external enhanced equity index managers to short stock. Currently, the system has seven managers running a total of $4.5 billion in U.S. domestic enhanced equity index strategies, of which four run $3 billion in stock-based strategies and three run $1.5 billion in derivatives-based strategies. In September, CalPERS picked AQR Capital Management and Quantitative Management Associates for the fund's pre-approved list of international enhanced equity managers.
During the current fiscal year, CalPERS staff also plans to consider creating internally managed emerging markets stock capability. Currently, CalPERS has $4.1 billion in the asset class managed by AllianceBernstein, Dimensional Fund Advisors and Genesis. CalPERS also plans to look into creating internally managed international enhanced stock-indexing. The move would be a natural extension of the $5.3 billion foreign-stock index fund CalPERS started in April. In addition, the staff is considering creating an international dynamic completion fund, an overlay strategy that would cover gaps in the fund's international equities portfolio.
CalPERS staff also plans to bring an additional $1 billion in currency overlay assets in-house on top of the $2 billion now run internally. External currency managers run $8 billion for CalPERS. Staff also plans to bring an additional $2 billion in collateral management from securities lending in-house, and to commit $1 billion to its internally managed credit enhancement program.
Separately, CalPERS committed C$135 million (US$115 million) to Birch Hill Equity Partners II, a Canadian buyout fund. It also committed up to $25 million to ICV Capital Partners II, a smaller middle-market private equity fund; up to $50 million to Pinnacle Ventures II, an emerging venture debt fund; and up to $200 million to WLR Recovery Fund III, a fund run by Wilbur R. Ross that will take sizable stakes in the distressed debt of bankrupt companies.
