US - The California Public Employees' Retirement System (CalPERS) has severed ties with Pacific Corporate Group (PCG) as part of an ongoing review of its private equity programme.
Pacific Corporate Group previously helped manage two emerging markets funds and the Clean Energy & Technology Fund. Aviva Capital, a former joint venture partner with PCG, will continue to manage over $1bn of invested and committed capital in the two emerging markets investment vehicles for CalPERS - Global Opportunities Fund 1 and 2 - under an independent investment team, and will be announcing a new name for the company in the near future.
CalPERS exercised "no fault rights" and enlisted Capital Dynamics to step in and manage the Clean Energy & Technology Fund - a $480m vehicle comprised of partnerships and co-investments in the "clean tech" sector.
The overhaul comes after CalPERS was caught up in the scandal involving payments to placement agents, third parties who help money managers find business.
"We're pleased to continue to support the Aviva team and are confident in their capability to succeed as an independent manager," said CalPERS chief investment officer Joe Dear. "Aviva has demonstrated an ability to find promising investments in emerging markets and we are excited about the prospect of continuing to build CalPERS exposure in these regions.
"We also welcome Capital Dynamics to the CalPERS portfolio.This new relationship and the repositioning of the assets with the new independent teams is part of the systematic restructuring of our private equity programme to reposition our assets and focus on improved performance, accountability and transparency with our partners."
Capital Dynamics will receive no new allocation in the Clean Energy & Technology fund but may make follow-on investments from uncommitted capital, the $216bn pension fund said.
CalPERS will also retain a relationship with a part of the team formerly known as PCG Corporate Partners to manage the remaining investments in the two Corporate Partner vehicles. Both funds are in the harvest period, and the newly independent team known as KMCP Advisors has been tasked with exiting the remaining investments over the next few years.
The CalPERS AIM program returned 30.9% on investment for the 12 months ending March 31, 2010. The asset class has a total market value of approximately $28bn.
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