CalPERS said the move is a significant step in efforts to halt the use of placement agents sometimes hired to seek pension fund money. The involvement of placement agents has come under fire in California and New York and sparked a joint state-federal investigation of the agents’ activities (see Golden State Placement Agent Bill Stalls in Committee).
In July, CalPERS will introduce a new Investment Proposal online service allowing managers to submit investment proposals to the fund in one of seven asset classes – Private Equity, Real Estate, Forestland, Infrastructure, Commodities, Global Fixed Income, and Global Equity, according to a CalPERS press release. Once submitted, the proposals will be reviewed by CalPERS staff.
To submit an investment idea, money managers will first be asked to choose an asset class that fits their proposal. The application will then walk the manager through a series of prompts seeking detailed information about the plan, including the manager’s history, investment track record, strategy, deal sourcing, and geographic and industry focus. The proposal will then be sent to the Investment Office, where an investment officer from the appropriate asset class will begin an evaluation.
The plan may be declined, accepted for additional due diligence by CalPERS staff or referred to one of the fund’s external partners for further review.
CalPERS Investment Office will also be holding Webinars in the fall describing how emerging managers can do business with the fund and explaining CalPERS thorough investment evaluation process, its asset classes, and investment programs.
“Giving money managers an easy and safe way to get their proposals to us will send a strong message that CalPERS wants the best investing ideas the industry has to offer,” said Joseph A. Dear, CalPERS Chief Investment Officer, in the press release. “One way we can sharpen our competitive edge is by making sure that top investment experts from around the world can all reach us in the quickest, most efficient and secure way possible. That’s what we’re doing with this application.”