CalPERS will take a close look at the value of external active equity managers but won’t start the review until 2014.
CalPERS’ investment committee agreed at a meeting Monday to use index-tracking strategies when there is a lack of conviction that the pension fund can add value through active management.
What that means for CalPERS’ several dozen external active equity managers is unclear for now. External managers run about 18% of the pension fund’s $134 billion equity portfolio.
Staff of the $259.8 billion California Public Employees’ Retirement System, Sacramento, will analyze individual active managers’ results in 2014 and compare the results with those of index strategies, Eric Baggesen, CalPERS senior investment officer for asset allocation, said in an interview.
Mr. Baggesen said it would be an ongoing discussion and couldn’t say when decisions might be made on potentially terminating active managers.
The discussion Monday came as part of a broader review of the pension fund’s investment beliefs. The investment committee is scheduled to vote formally on investment beliefs Sept. 16.