CalPERS will implement a new RFP process for global equities, which is more consistent with the transformation of its global equities portfolio and the desire to assess every strategy, than its current Spring Fed Pool system, Eric Baggesen, senior investment officer of global equities said.
In a presentation to the investment committee meeting on April 12, Baggesen said the new system would allow the investment staff to respond to any strategy in the market rather than work only within predisposed criteria.
The fund will now use the Investment Proposal Tracking System portal and all proposals will be vetted through the investment strategy group, which will act as an internal governance review that assesses the attributes and merits of each proposal and evaluates its return on investment to the portfolio. Managers selected by staff will be presented to the investment committee for approval before contracts are awarded.
Baggesen said the fund now had about 125 proposals outstanding, that would be cleared this year; the portal would then be used for manager proposals, which would be on going.
“Then we will bring periodic items to the investment committee and report on those new strategies coming through the system,” he said. “This builds on the transformation of global equities, where we assess every strategy.”
Baggesen reminded the investment committee that the criteria for manager selection was not the highest performing manager.
“If anything research says sell the highest performing manager,” he told the investment committee meeting
“We select managers and strategies that interact with every other capital allocation.”