Key Takeaways
- • Stephen Gilmore says CalPERS can add 50 to 60 basis points to portfolio returns by using a total portfolio approach (TPA), according to Top1000funds.com.
- • CalPERS' board adopted the TPA model, with the framework described as a shift that could influence its private market allocations.
- • CalPERS plans to link more investment staff incentives to total fund performance, a change slated for a June board meeting.
- • Anton Orlich, CalPERS' deputy chief investment officer for private markets, says TPA will not impede the private equity program launched in 2022, with relative-value calls expressed in liquid markets rather than through commitment swings.
Summary
Stephen Gilmore says CalPERS can add 50 to 60 basis points to portfolio returns by adopting a total portfolio approach, according to a long-form interview published by Top1000funds.com. The primary source is a teaser for that interview, so the full detail on Gilmore's methodology is limited to the publisher's excerpt.
Additional coverage places the TPA initiative in the context of CalPERS' broader governance changes. A CalPERS board decision adopted a streamlined investment approach under which the focus shifts to which investments contribute most to the performance of the total portfolio, rather than to individual asset class allocations. CalPERS is also set to consider linking more investment staff incentives to total fund performance at a June board meeting. Commentary on the adoption describes it as a shift in investment framework that could influence the fund's private market allocations.
On private markets, Top1000funds.com reports that Anton Orlich, CalPERS' newly appointed deputy chief investment officer for private markets, says the July adoption of TPA will not impede the private equity strategy launched in 2022. Orlich argues that short-term relative-value views under TPA would be expressed in liquid markets rather than through oscillating private markets commitments.
The publisher's related materials also reference TPA implementation documents, including a risk-budgeting framework and a proposed 400 basis point active risk limit within the asset liability management process. Those figures appear in agenda materials and are not confirmed as final policy in the sources reviewed.
Additional coverage places the TPA initiative in the context of CalPERS' broader governance changes. A CalPERS board decision adopted a streamlined investment approach under which the focus shifts to which investments contribute most to the performance of the total portfolio, rather than to individual asset class allocations. CalPERS is also set to consider linking more investment staff incentives to total fund performance at a June board meeting. Commentary on the adoption describes it as a shift in investment framework that could influence the fund's private market allocations.
On private markets, Top1000funds.com reports that Anton Orlich, CalPERS' newly appointed deputy chief investment officer for private markets, says the July adoption of TPA will not impede the private equity strategy launched in 2022. Orlich argues that short-term relative-value views under TPA would be expressed in liquid markets rather than through oscillating private markets commitments.
The publisher's related materials also reference TPA implementation documents, including a risk-budgeting framework and a proposed 400 basis point active risk limit within the asset liability management process. Those figures appear in agenda materials and are not confirmed as final policy in the sources reviewed.
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