CalPERS plans to search for domestic growth equity managers to place on a pre-approved list. According to a memo to the board of the $197.4 billion California Public Employees' Retirement System, Sacramento, staff recommends issuing an RFP for both active and enhanced indexed managers that could be given allocations at staff's discretion. If approved by the board at its Dec. 12 meeting, staff expects to issue an RFP in January, with managers to be selected in June. Staff and many experts believe that growth stocks will begin to outperform value stocks, reversing a five-year trend, the memo said. Most of the funding for new growth managers would come from passively managed U.S. equities, but some might also come from reducing the portfolios of other U.S. equity managers, the memo added. CalPERS currently has two active domestic growth equity managers: Franklin Advisors, which runs $522 million, and Geewax Terker, which handles $468 million.
Separately, staff recommended renewing the annual contracts of its two currency overlay managers, Pareto Partners and State Street Global Advisors. As of Sept. 30, Pareto and SSgA overlaid $5.8 billion and $2.5 billion, respectively, of CalPERS' passively managed international equity portfolios.
Wilshire Associates is consultant on both proposals.