CalPERS holds off on seeking a new PE head

The pension plan, which has $26bn in private equity, has been waiting until it has a clearer path towards its new private equity strategy.

The California Public Employees’ Retirement System will likely start its search for a replacement of Réal Desrochers, its managing investment director for private equity who left in April, once it specifies its new private equity strategy.

“I’ve been holding off on recruiting until we conclude our business model discussions,” said Ted Eliopoulos, chief investment officer at the pension plan, during CalPERS’ open session at its November board meeting on Monday.

CalPERS has been discussing integrating private equity into its global equity programme.

“I think in an ideal world, we’ve had some ideas of the strategy that we’ll be pursuing before we open that recruitment. So hopefully our discussions will progress in closed session today and into the end of the year and we’ll be in a position to open that recruitment,” said Eliopoulos.

Desrochers left CalPERS after six years at the plan.

Its private equity team has shrunk from 50 people to 35 over the past 15 months, according to Sarah Corr, the interim managing investment director, who also spoke at the meeting.

She noted that the reduced headcount included four people leaving CalPERS and 10 leaving the private equity programme but moving to other parts of the pension plan.

Wylie Tollette, chief operating officer at CalPERS, said eight of the 10 transferred were associated with private equity operations and helped process capital calls and distributions as well as private equity analytics.

“They historically were vetted within the private equity team and we carved then off and now they report up to me,” he said.

“The idea is to create some degree of independence between the attribution professionals, sort of the score keepers and the investment professionals. They’re still very much in support of trying to ensure the private equity team has the analytics they need to make good investment decisions, but we found a degree of independence is helpful in ensuring the integrity for the entire office.”

The plan’s private equity programme also has a vacant investment officer position.

CalPERS has about 8 percent ($26 billion) of its total assets in private equity.