CalPERS Strengthens Emerging Markets Equity Ban

February 18, 2003 ( - The California Public Employees' Retirement System (CalPERS) has overhauled its emerging market policy by barring stock investment in Malaysia, Thailand, India, Russia, and eight other nations.

Board members of the nation’s largest public pension fund backed a proposal by activist California state treasurer Phil Angelides that would ban equity investments in 12 countries from Colombia to China. The decision was based on a numerical scoring by an outside consultant, according to a Reuters news report (See New Emerging Market Standard Emerges at CalPERS ).

CalPERS, which has $133 billion in assets, had been expected to put Thailand and Malaysia back on its list of green-lighted emerging markets, but voted instead to tighten its standards even further than the staff had recommended. Under the revised standards, investment would be cleared for 14 emerging markets, including South Korea, Poland and Israel. 

In another twist, the fund, which has a $1.8-billion position in emerging markets, said it would keep the Philippines on its target investment list for now (See    Philippines Could be Off CalPERS List Again  ). Officials said they would do a further review after officials from that nation appealed the staff recommendation that it be dropped.