US - The US$182bn California Public Employees Retirement System (CalPERS) has tapped eight managers to be part of pools that will manage international equity enhanced index strategies and international active management for the fund.
In separate board actions, the fund added Argentina, Sri Lanka, Thailand and Turkey to its list of acceptable emerging equity mandates and reappointed Wilshire Associates as its primary pension consultant.
The eight selected managers are Barclays Global Investors, Baring Asset Management, JP Morgan Fleming Asset Management, Alliance Capital (International Strategic Value), Alliance Capital (International Large Cap Growth), PanAgora Asset Management, New Start Institutional Managers and The Boston Company Asset Management.
CalPERS said it would choose managers from the “spring-fed pool” to launch its international equity enhanced indexing strategies. It will use a second pool to potentially add to its line-up of active international equity managers.
Currently, the fund uses eight managers to actively invest US$5.9bn in international stocks. The new managers’ contracts will be reviewed annually.
“These pools will enable us to respond more quickly to developments in today’s rapidly changing marketplace,” said Chuck Valdes (pictures), chair of CalPERS investment committee.
“This new streamlined process will help us move our money opportunistically with more flexibility than in the past, generating improved returns.”
Commenting on the additions of emerging equity markets, Valdes said: “We are witnessing a greater level of transparency and an increased effort by countries to reform their markets to support institutional investment.”
He said Sri Lanka and Thailand, two countries that didn’t meet the fund’s standards in 2004, made the list after the political environment in Sri Lanka improved and Thailand expanded market capitalisation in its equity markets and lowered transaction costs through levied taxes.
Argentina and Turkey were granted a one-year cure period in 2004 by CalPERS but political stability in both countries has now improved, he added.
Colombia, China, Egypt, Morocco, Pakistan, Russia, Venezuela and Indonesia remain off the list of equity investment opportunities.
Wilshire Associates three-year contract is effective July 1, with the option of two one-year extensions by CalPERS.
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