SACRAMENTO, Calif. — CalPERS yanked more than $7 billion from its external managers, including some of the biggest names in money management.
The biggest loser: San Francisco-based Barclays Global Investors, which lost a combined $2.4 billion in domestic and international enhanced equity portfolios. Goldman Sachs Asset Management, New York, lost nearly $400 million from its small-cap enhanced index portfolio, while Western Asset Management Co., Pasadena, Calif., lost more than $340 million in fixed-income assets.
Other enhanced index managers also saw their allocations reduced, and some active equity managers were trimmed, according to data posted on the pension fund's website in advance of a May 12 board meeting.
In addition, the $248.2 billion California Public Employees Retirement System, Sacramento, reduced its external global fixed-income managers by a combined $1.3 billion.
Most of the affected assets were moved in-house: $3.7 billion was added to CalPERS' domestic equity transition fund, while $2.6 billion was added to its international equity transition pool.
“The shifts were part of the global equity restructure that impacts almost all portions of the program. The assets are being redeployed all over the spectrum from external managers to internal portfolios to transition accounts,” said Clark McKinley, CalPERS spokesman.
In December, the board of trustees approved CalPERS' biggest asset allocation changes in a decade. The global equity target was pared to 56% of total assets from 60%. Private equity and real estate were increased to 10% each, up from 6% and 8%, respectively. A new inflation-linked asset class was given a 5% target, and global fixed income dropped to 19% of assets from 26%.
The flurry of activity will continue as the new asset allocation is put in place, said Mr. McKinley. The timeline for reaching the new targets is three years, he said.