Famed investment guru Charles Ellis has a new gig. Mr. Ellis, the founder of Greenwich Associates, has been working for CalPERS as a consultant.
“I do some work … on questions of longer-term investment management and policy and practices,” Mr. Ellis said. “These are very, very large complex questions.”
Mr. Ellis did not go into specifics. But at several CalPERS' board meetings, Mr. Ellis has talked about the difficulty — given the $306.6 billion penson fund's size — of finding suitable investment opportunities that can outperform the market.
On Jan. 17, Mr. Ellis moderated a panel at a CalPERS meeting about the pension fund's long-term investment returns. The group discussed declining outlooks and whether the Sacramento-based fund would be able to achieve its new annualized rate of return, which will drop to 7% from 7.5% over the next three years.
At the end of the discussion, Mr. Ellis asked the panelists, including representatives from large money managers, whether it is realistic to assume a 7% return long term. They all said no, bucking the official line of the pension fund's investment staff.
What is Mr. Ellis' position? He called the situation, “complicated,” and said “it's not for me to say” whether CalPERS can meet its projections.
He also acts as a rainmaker of sorts, though he is not naming names. That involves helping CalPERS officials connect with money managers, economists and academics.
“One of the advantages of being in my age group is that I have been all over the place and have met lots of nice people,” the 79-year-old said.