CalPERS Supports Emerging Managers

(April 28, 2011) — The $236 billion California Public Employees’ Retirement System (CalPERS) has  committed $400 million to three emerging managers in the pension fund’s Manager Development Program II (MDP II) for public equity investment.

CalPERS’ emerging manager program provides assets to small and emerging public equity firms that have $2 billion or less of assets under management. In addition, the program supplies venture capital in exchange for a significant but minority equity stake. “These emerging managers will play an important role in our effort to nurture potential diverse major players in the financial markets,” said Joseph Dear, CalPERS Chief Investment Officer, in a statement.

According to a release issued by the nation’s largest public pension, CalPERS said it has allocated $150 million each to TOBAM of Paris, an institutional investment company, and to Victoria, a San Francisco-based company focused on emerging markets. Furthermore, CalPERS also has allocated $100 million to Quotient for its new environmental, social and governance product.

The $400 million commitment to emerging market managers signals the growing popularity of investment in the asset class. The China Investment Corporation (CIC) is targeting emerging economies to expand its overseas investment in developing economies, the China Daily reported, citing the fund’s chairman, Lou Jiwei. Meanwhile, a study by the Emerging Markets Private Equity Association and Coller Capital provided further evidence for the popularity, finding that Brazil will be the most attractive emerging market country for private equity investors in the next 12 months.