CalPERS

“CalPERS is having it now. They realize they, what was it, four billion dollars in private equity carry was paid to GPs alone over a five-year period.”

“You never say no, and then figure out how to give them at least some of what they want, so that this way you show them that you've heard them, and that's 90% of what the issue is. The client wants to be heard.”

“The best hedge funds wanted nothing to do with CalPERS because CalPERS wasn't willing to pay their fees, and Ted Eliopoulos, the chief investment officer, eliminated the hedge fund program”

“From a cost standpoint and from a volume standpoint, CalPERS at Wilshire's recommendation has a significant portion of its assets indexed to the Wilshire 5000 stock index.”

“We even, I remember in oh seven being called into the Department of Finance to ask myself and the counterpart at CalPERS to price out buying puts for the entire portfolio. And we came back and said, you know, it'll cost you 300 basis points on the return. Woul…”

“The USA is about the only place Where particularly the pension plan asset management side is still very much part of the governmental entity. We're definitely in the org chart under the executive branch of California state government, right there with CalPERS …”

“Well, the point is, most of the big asset owners, let's take public pension fund as an example, GPF, Culpers, Coasters, and all the big public pension funds, their most critical decision In terms of the financial performance of their portfolio performance is n…”

“This is not a CalPERS, CalSTRS, Hermes problem. This is a Japanese pension fund problem that the Japanese have to decide for themselves To start paying their beneficiaries properly.”

“Most of these organizations have monopolies over the asset base, which means Stanford management company isn't going away. CalPERS isn't going away, but the people in those organizations can be fired. And so you as an employee of these organizations, and I'm n…”

“How is like we've seen, and I've written about this like collaborative model of investment where Pension funds and endowments and sovereign funds will come together and collaborate. They'll pool resources. They will pool career risk. If I'm working with Ontari…”

“We've seen tons of examples like CalPERS and CalSTRS and even UC Regents where fees and costs have driven changes in their portfolio, just the transparency.”

“It's, a lot of it is because we're at a size of ten billion. I can do that. Again, I really feel for the people at CalPERS who you just can't move the needle, and I feel badly for the firms that are, you know, five hundred million to a billion, you're not goin…”

“The reality is that the bulk of capital is going to be invested through larger managers because of the size of our portfolio.”

“Some years earlier, Marcy had changed the compensation structure so that everyone got rewarded on the basis of the whole portfolio, not their asset class.”

“The equity team, the fixed income team have been good at generating good information ratios, but it hasn't been scaled, which I found interesting because there have been constraints on the active risks that can be taken and sub-constraints.”

“With our proposed approach for the total portfolio, the board adopts a reference portfolio, and that corresponds to a particular amount of risk, but it's the management that is using its initiative to propose the portfolio and to invest the portfolio. The mana…”

“What we did was to look at how much that variation would aggregate up to in terms of the leeway management had been delegated. We estimated that that amounted to around about 450 basis points of active risk using all the policy ranges.”

“We've recommended a 75% equity, 25% bond portfolio. We've recommended an active risk range around 400 basis points.”

“I don't anticipate that we will be particularly active direct privates apart from co-investment, but I expect that we will become more active in the public markets given the balance sheet management and our improved liquidity management.”

“When you're thinking about its contribution to the whole portfolio, you should be much more comfortable in having a more concentrated asset class portfolio because it gets diversified away at the whole portfolio level.”

“One of the things that has attracted value from the CalPERS experience has been a tendency to be too pro-cyclical. If you think back to the time of the financial crisis, Various assets were liquidated. Risk was taken off. That was done in part because of conce…”

“If you look at all the different investment strategies, when I first looked at the analysis, I thought, well, actually the hit rate or the banning average is pretty ordinary. That's not that unusual, but the slugging average was amazing. The areas that it did …”

“You can take a simple combination of equities and bonds, and it will track the actual portfolio very closely. And that'll be the case for most pension funds.”

“We're just over 80% funded.”

“If you're sitting there with a strategic asset allocation, and you've got all these asset classes, it could be that you've got a hybrid, where does it sit? Or there could be something that's new, and you don't have a bucket for it. It's hard to do. With the to…”

“With the transition to a total portfolio approach, we weren't asking for that much active risk. We were asking for more flexibility in how we used it.”

“Rather than simply looking at historical correlations, one needs to be thinking about multi-dimensional scenarios and to think about how the portfolio behaves given those scenarios.”