Key Takeaways
- • CalPERS has committed $20.9 billion to 51 emerging and diverse managers since 2022, demonstrating sustained institutional capital allocation to this segment.
- • Peter Cashion, managing director for sustainable investments at CalPERS, is directing real assets and private debt teams to increase engagement with emerging and diverse fund managers.
- • The pension plan is actively expanding its emerging managers programme, building on over 30 years of experience developing and implementing such initiatives.
- • CalPERS is positioning emerging manager investments as a strategic lever for improving overall portfolio returns and funded status through diversity, equity, and inclusion efforts.
- • The $239 billion pension system has deployed emerging managers across multiple asset classes, including private equity, real assets, and private debt, with ongoing recruitment of new domestic emerging managers.
Summary
CalPERS, the $239 billion California state employees' pension plan, is expanding its emerging managers programme across its real assets and private debt investment teams. Peter Cashion, managing director for sustainable investments at CalPERS, is spearheading efforts to increase institutional capital flows to emerging and diverse fund managers—a strategic priority aimed at broadening the investment ecosystem and improving risk-adjusted returns.
The pension system's commitment to this segment has accelerated in recent years. Since 2022, when CalPERS began formal record-keeping on emerging manager allocations, the fund has committed $20.9 billion across 51 emerging and diverse managers. This substantial deployment reflects CalPERS' view that emerging manager investments can enhance portfolio performance while advancing diversity, equity, and inclusion objectives.
CalPERS' emerging managers programme has operated for over 30 years, establishing the pension system as an anchor limited partner in the emerging manager ecosystem. The fund's strategy positions emerging manager commitments as a mechanism to help early-stage managers mitigate risk, accelerate growth, and transition to larger institutional scale. By directing its real assets and private debt teams to actively engage with more emerging and diverse managers, CalPERS is reinforcing institutional capital as a development tool for fund managers at critical growth stages.
The pension system views this expansion through a financial performance lens, emphasizing that diversity and emerging manager engagement can improve investment returns and increase funded status. With ongoing recruitment of domestic emerging private equity managers and commitments across multiple asset classes, CalPERS is leveraging its scale and institutional credibility to deepen its presence in the emerging manager market while managing fiduciary objectives.
The pension system's commitment to this segment has accelerated in recent years. Since 2022, when CalPERS began formal record-keeping on emerging manager allocations, the fund has committed $20.9 billion across 51 emerging and diverse managers. This substantial deployment reflects CalPERS' view that emerging manager investments can enhance portfolio performance while advancing diversity, equity, and inclusion objectives.
CalPERS' emerging managers programme has operated for over 30 years, establishing the pension system as an anchor limited partner in the emerging manager ecosystem. The fund's strategy positions emerging manager commitments as a mechanism to help early-stage managers mitigate risk, accelerate growth, and transition to larger institutional scale. By directing its real assets and private debt teams to actively engage with more emerging and diverse managers, CalPERS is reinforcing institutional capital as a development tool for fund managers at critical growth stages.
The pension system views this expansion through a financial performance lens, emphasizing that diversity and emerging manager engagement can improve investment returns and increase funded status. With ongoing recruitment of domestic emerging private equity managers and commitments across multiple asset classes, CalPERS is leveraging its scale and institutional credibility to deepen its presence in the emerging manager market while managing fiduciary objectives.
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