Gideon Smith: Fundamentals and the golden age for quants

I chat with Gideon, CIO & global head of portfolio
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CalPERS’ private markets chief: TPA won’t disrupt PE commitment pacing

CalPERS’ private markets chief: TPA won’t disrupt PE commitment pacing

Anton Orlich, CalPERS' newly minted deputy chief investment officer for private markets, says the fund’s July adoption of the total portfolio approach will not impede the private equity strategy launched in 2022, arguing that short-term relative-value calls made under TPA would be expressed in liquid markets and not by oscillating commitments to private markets. In an interview with Top1000funds.com, Orlich unpacks the asset class’s four-year transformation.

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Long-term investors using short-term strategies

There is a contradiction in the way that many long-horizon asset owners behave. On one hand, they are increasingly concerned about the externalities imposed on wider society by the companies they own. But on the other, they tend to ignore the social costs imposed by the short-horizon strategies that they employ such as momentum and tracking error constraints. The transmission mechanism for this social cost is via asset mispricing, which leads to capital misallocation and incentives for CEOs to focus on short-term share price maximisation.

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