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External money managers seeking business with the California Public Employees’ Retirement System (CalPERS) will soon be able to use the Internet to send their proposals directly to the Fund’s investment professionals, a significant step in efforts to halt the use of placement agents sometimes hired to seek Pension Fund money.
CalPERS Investment Office will also be holding webinars in the fall describing how emerging managers can do business with the Fund and explaining CalPERS thorough investment evaluation process, its asset classes and investment programs.
In July, CalPERS will introduce a new Investment Proposal online service allowing skilled managers to submit investment proposals to the Fund in one of seven asset classes – Private Equity, Real Estate, Forestland, Infrastructure, Commodities, Global Fixed Income and Global Equity. Once submitted, the proposals will be thoroughly reviewed by CalPERS staff.
“Giving money managers an easy and safe way to get their proposals to us will send a strong message that CalPERS wants the best investing ideas the industry has to offer,” said Joseph A. Dear, CalPERS Chief Investment Officer. “One way we can sharpen our competitive edge is by making sure that top investment experts from around the world can all reach us in the quickest, most efficient and secure way possible. That’s what we’re doing with this application.
“Our webinars will model our successful workshops for emerging managers by providing an overview of our emerging manager programs and the qualities we seek when hiring investment managers,” said Dear. “We also plan to share important tips on how to work with CalPERS.”
To submit an investment idea, money managers will first be asked to choose an asset class that fits their proposal. The application will then walk the manager through a series of prompts seeking detailed information about the plan, including the manager’s history, investment track record, strategy, deal sourcing and geographic and industry focus.
The proposal will then be sent to the Investment Office, where an investment officer from the appropriate asset class will begin an evaluation. The plan may be declined, accepted for additional due diligence by CalPERS staff or referred to one of the Fund’s external partners for further review.
The July launch of the Investment Proposal application follows a year of national debate over the role of placement agents.
“We’re working hard to make sure that money managers have all the access they need to do business with us,” Dear said. “There’s no need for them to pay someone to call us or to set up a meeting. They can contact us themselves with the tools and technology we have. Our door is open.”
Dear also recently announced that CalPERS has reached agreement with more than 50 investment partners to cut about $99 million in fees. The reductions are in addition to the $125 million fee-cut agreement announced earlier with Apollo Global Management.
With about $200 billion in assets, CalPERS is the nation’s largest public Pension Fund and administers retirement benefits for more than 1.6 million active and retired State, public school, and local public agency employees and their families. For information about CalPERS, visit www.calpers.ca.gov.
