US - The California Public Employees' Retirement System (CalPERS) has made the first $100m investment from its Manager Development Program II (MDP II).
The investment was made in Piedmont Investment Advisors' market plus product, a large cap enhanced index equity strategy. North Carolina based Piedmont specialises in actively managed equity and fixed income strategies.
"Piedmont brings us broad investment talent and varied perspectives that should generate positive long term returns," said Russell Read, CalPERS chief investment officer.
CalPERS designed MDP II to provide superior investment returns and provide opportunities to new and emerging money managers that typically do not have the long term track record of more established firms.
Piedmont is an employee-owned investment management firm with $1.3bn in assets under management at the end of 2006. The firm was chosen through a CalPERS partnership with Legato Capital Management LLC, which became an MDP II joint venture partner with the pension fund in January 2006.
Legato will be providing venture capital along with CalPERS to new and emerging firms that have less than $2bn under management.
Besides capital, Legato will provide Piedmont with strategic assistance to help the firm realise its full potential and generate superior investment returns. Legato is accepting proposals from emerging firms that manage long-only public equity strategies such as mid- and large-cap global equity in domestic, international, and emerging markets, as well as high-yield fixed income.
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