CalPERS' investment committee has cleared the way for the pension fund's private equity staff to make more investments with its three largest private equity partners, Apollo Global Management, Carlyle Group and Blackstone Group, allowing billions of dollars more to go to the private equity giants.
The disclosure, contained in materials for the committee's Oct. 13 meeting, shows that in closed session in August, committee members for the $294.2 billion California Public Employees' Retirement System, Sacramento, approved raising the limit on the amount of committed capital that can go to any one private equity firm to 15% from 10% of the pension fund's $31.4 billion private equity portfolio.
The meeting materials say private equity investment staff will be allowed “to pursue investment opportunities with three managers.”
While the disclosure does not name the managers, CalPERS statistics show that as of March 31, Blackstone was near the 10% cap with more than $2.5 billion in investments; Carlyle, with more than $3.5 billion, and Apollo, with more than $4.5 billion, exceeded 10%.
The disclosure said increasing investments to the top-performing mangers is in line with consolidating CalPERS' private equity portfolio to reduce fees. CalPERS has more than 300 managers and 700 funds.
CalPERS also announced Wednesday in a news release that Grosvenor Capital Management was selected to run its new $200 million private equity emerging managers fund of funds.
“CalPERS is firmly committed to emerging manager strategies,” said Ted Eliopoulos, CalPERS' chief investment officer, in a statement. “Grosvenor is a leader in the industry, and has the experience and ability to harness the unique potential in the emerging manager community in order to deliver positive returns to CalPERS.”
The pension fund has two other emerging manager funds of funds for private equity, both of which have underperformed CalPERS' overall private equity portfolio, CalPERS officials have previous disclosed at investment committee meetings.
CalPERS also announced it will invest $100 million in AGI Resmark Housing Fund, a multifamily residential apartment development fund focused in the San Francisco Bay area. AGI Resmark is a co-investment partnership between AGI Capital and Resmark.
CalPERS spokesman Joe DeAnda did not respond to e-mails seeking additional comment.