CalPERS picked Pacific Alternative Asset Management, 47°N Capital Management and Rock Creek Group to help the $236.6 billion system create three customized funds of funds comprising emerging absolute-return managers. A total of $350 million initially will be allocated to the new funds of funds. Mosaic Investment Advisors, CalPERS diversity consultant, will work with each firm. PAAMCO already is a strategic adviser to California Public Employees Retirement Systems $4.3 billion absolute-return program. Funding is expected to come from CalPERS passive global equities program.
CalPERS also hired Piedmont Investment Advisors to run $100 million in an enhanced U.S. large-cap index equity strategy. Piedmont is the first manager chosen for CalPERS Manager Development Program II. CalPERS and Legato Capital Management, one of the advisers on the program, will take minority stakes in Piedmont. Terms were not disclosed. Legato also will provide strategic advice to Piedmont.
Separately, CalPERS staff recommended adding Lovell Minnick Leading Edge Advisors to a pre-approved list of five advisers for MDP II. The firm is a joint venture between Lovell Minnick Advisors and Leading Edge Advisors. The investment committee will consider the recommendation at its March 12 meeting.