CalPERS hunts for new talent

The state pension fund will start accepting proposals for its programme to commit to new private equity investment managers on 11 July.

The California Public Employees' Retirement System is looking to commit to five new private equity managers and will begin accepting proposals on 11 July, the plan said during  a webinar on Thursday.

While the program is designed to offer a chance for new managers, debut funds need not apply. CalPERS is seeking private equity managers with a domestic focus on their third, fourth, fifth or sixth institutional fund with at least $1 billion in assets under management. 

It is looking for buyout and growth strategies, and is excluding venture capital and debt funds as part of this programme. Any private equity manager selected will receive a minimum investment of $100 million from the pension fund. 

Beyond that, CalPERS stressed it will select new managers according to usual criteria including portfolio fit, strategy and value creation, management team and talent, alignment of interest and historical performance. These new commitments will be in the form of direct relationships with the chosen managers and not through any fund of funds vehicle. 

During the formal solicitation, the pension fund will be accepting proposals from new managers until 31 August. Questions can be submitted until 25 July, with CalPERS responding to those inquiries by 15 August.

David Merwin, an investment oficer with CalPERS who hosted the webinar, noted there will be a second formal solicitation period in 2019 and that all proposals must be submitted electronically. 

CalPERS first launched this program in 2015, when a survey found there was no path for emerging managers to become established managers for the pension fund. However, this call for proposals comes in the wake of the fund's chief investment officer Ted Eliopoulos announcing to the investment committee on Monday that CalPERS may be reducing its allocation to private equity over continued criticism concerning the transparency of fees and expenses.