CalPERS plans to begin a search in July 2017 for transition managers and emerging managers to which it expects to commit up to $11 billion by 2020, the $294.1 billion pension fund announced in a news release Thursday.
CalPERS defines emerging managers as those who are newly formed firms with very little track record, and transition managers as those who have already had “early-stage” success, either within CalPERS’ emerging managers program or elsewhere.
The California Public Employees’ Retirement System’s transition manager program will make commitments totaling up to $7 billion by 2020. Those commitments will total up to $2 billion total each in real estate and private equity, and up to $3 billion total in the global equity program.
The emerging manager program will make commitments totaling up to $4 billion by 2020. Those commitments will total up to $500 million each in real estate and private equity, and up to $3 billion total in global equity.
The Sacramento-based pension fund will make a formal announcement regarding the search at the Global Entrepreneur Summit 2016, which takes place at Stanford University through Friday.
“Our objective for investing with emerging and transition managers is to generate appropriate risk-adjusted investment returns by identifying early funds with strong potential for success; accessing unique investment opportunities that may otherwise be overlooked; and cultivating the next generation of external portfolio management talent,” said Laurie Weir, investment director for targeted investment programs at CalPERS, in the news release. “We hope this advance notice will give managers time to learn more about CalPERS' programs and prepare their proposals.”
CalPERS will utilize its “alternative solicitation process,” CalPERS spokesman Joe DeAnda said in an e-mail, which “may be used as a method of gathering information on skills and services of potential managers. Each solicitation is limited to the services and strategies requested by the specific CalPERS investment division.” Further details were not available.
Information on the emerging and transition manager programs is available on CalPERS’ website.