As part of the new strategic relationship, CIM has agreed to reduce, by $50 million over the coming years, the fees it earns on funds CIM manages solely for CalPERS. CIM said in a press release it is optimistic that it will increase the amount of funds that it manages for CalPERS, and some of such increases may be in sole-managed separate accounts. Currently, this type of separate account represents approximately 20% of the total funds that CIM manages for CalPERS.
The new strategic relationship will not impact CIM’s commingled funds or the fees paid by CalPERS for such funds, according to the announcement.
CalPERS and CIM have been working together for a decade (see CalPERS Says Yes To CIM, Later On Tobacco).CIM’s letter agreement is a part of CalPERS’ broader initiative seeking to consolidate its investments utilizing its best managers and through that process reduce its costs and improve its returns (see CalPERS Makes PE Program Changes and CalPERS Shifts $1B Apartment Investments Mandate from BlackRock).
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