CalPERS to Outsource Private Equity Assets to BlackRock

The California Public Employees’ Retirement System (CalPERS) is seeking to outsource its private equity business to BlackRock, according to anonymous sources quoted by Reuters and Bloomberg.

The reported discussions between the largest US pension fund and the world’s largest asset manager to oversee some or all of CalPERS’s private equity investments are at an early stage, which may not result in an agreement, according to Reuters. For the past two decades, private equity has been the $327 billion CalPERS’s best-performing asset class and accounts for roughly $26 billion of the fund’s portfolio.

“No decisions have been made. We are still looking at models to bring back to the board,” a spokeswoman for CalPERS told CIO in an email.

In the event of a deal, BlackRock would win big, as the move would assist it in expanding its alternatives business, a footprint the $5.7 trillion money manager has been trying to grow to increase fee revenue and meet client demand for investments with little stock and bond market ties, according to Bloomberg, who first reported BlackRock’s talks with CalPERS Thursday.

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BlackRock could not be reached for comment.

Tags: BlackRock, CalPERS, Pension, Private Equity

Romania could be heading toward making its mandatory private pension plan optional from 2018, according to Prime Minister Mihai Tudose.

Just last month, Tudose said that the government was considering reducing contributions to mandatory private pension plans as well as redirecting some funds into state pensions. Romania’s government may be looking in other directions for the funds by potentially putting citizens in charge of their own retirements.

“I think the solution we are heading toward is to tell the population, based on their salary levels, where it is best to keep their money,” Tudose told local television station Digi24. “No one is dismantling the second pillar, tormenting or torturing it, but it will be optional.”

In 2008, Romania reformed its communist-era pension system, allowing Romanians under age 35 to contribute a “second pillar” of private pension plans in addition to their state pension. According to Reuters, just under 7 million people were contributing to second-pillar private pension schemes, which were 36.06 billion lei at the end of June, equal to more than 4% of gross domestic product.

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Tags: Pension, Private Pension, Romania, Second Pillar Pension

Romanian Prime Minister Suggests Making Private Pension Plan Optional