The $183 billion CalPERS board has made the first formal changes to its asset allocation targets since January 2008, increasing exposures to private equity and cash, and narrowing the discretionary ranges around all asset classes set in December last year.
CalPERS has reached its capacity to internally manage equities portfolios and would need to make changes to technology and staff resources if the internally-managed equities program is expanded, according to the outcome of the annual consultant review of CalPERS’ internal equity team by Wilshire Associates.
CalPERS is considering adopting an “opportunistic” program seeking to profit from substantially undervalued assets across various asset classes and strategies, and will be limited to 3 per cent of the fund’s total market value.
Last year large institutional investors in the US, including the State of Massachusetts Pension Fund and CalPERS, dedicated money to senior bank loans. Amanda White examines the outlook for the sector and talks to group head of ING’s senior loan group, Jeff Bakalar, about whether institutional allocations to the sector have been tactical or strategic.
CalPERS has led the charge in the adoption of fundamental indexing, but the concept has a long way to go before it challenges the conventional cap-weighted strategy. Michael Bailey spoke to chairman of Research Affiliates, and one of the originators of fundamental indexing, Rob Arnott.
Institutional investors in the US, including the largest pension fund in the country, CalPERS, have applauded the introduction of the Shareholder Bill of Rights which includes reform to allow long-term investors to nominate their own director candidates on the management proxy card.
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