CalPERS is making significant headway in revamping its $10.6 billion alternative investment management program, according to a staff memo. Staff of the $207.1 billion California Public Employees' Retirement System, Sacramento, and Pension Consulting Alliance are deciding how to deal with a legacy portfolio of non-core underperforming limited partnerships. One option would be to place all of the interests in a separate account managed by a third party, where some would be allowed to grow while others would be wound down. Another option: selling the interests in the secondary market.
Staff and PCA also have developed categories for new smaller investments, which could be either funds of funds or separate accounts. They are: domestic emerging managers; international emerging markets; California investments; clean energy and technology; middle-market private equity; and venture capital. General partners would be hired for each vehicle.
At the April 17 investment committee meeting, staff plans to seek greater investment discretion for new projects and co-investments. Staff plans to propose changes to the alternatives benchmark at that meeting.