CalPERS staff recommended issuing an RFP for an emerging manager fund of funds. The program would be open to long-only U.S. and international equity strategies. CalPERS officials expect to fund one to three emerging manager fund-of-funds with an initial total allocation of $1 billion, with manager allocations expected to be less than $50 million each, according to a staff memo. Eligible managers would need to manage less than $2 billion in assets each.
The $231.5 billion California Public Employees' Retirement System's existing emerging managers programs take equity stakes in selected firms, while the fund-of-funds program would not, the memo explained. The new program would be better suited to managers that do not require additional working capital or guidance. CalPERS staff recommended creating a pre-approved list of fund-of-funds managers, which would allow staff to add managers after the initial list is funded.
Mosaic Investment Advisors, one of CalPERS' diversity advisers, is developing the fund-of-funds strategy.
Separately, staff recommended hiring eight firms to be included in the fund's pre-approved list of real estate consultants, which are called on to handle specific projects where they have specific expertise, such as single-family homes or senior housing. The firms are: ARUP, Callan Associates, Cortexion, Ennis Knupp, JDM Associates, Navigant Consulting, ORG Portfolio Management and Property & Portfolio Research.
Staff also recommended using Wilshire Associates, the fund's general consultant, to assist in evaluating its $500 million pilot program in commodities.
The recommendations will be reviewed at CalPERS' Feb. 20 investment committee meeting.
(updated with correction)
