The $351 billion California Public Employees’ Retirement System has opened a solicitation for a transition manager or managers to assist with its $30.54 billion real estate portfolio. The pension fund is looking for one or more firms to manage $200 million to $400 million in potential equity, with the possibility of growing the account over time.
The new manager(s)’ focus will be on core-plus and value-added office buildings in the San Francisco Bay Area and New York City.
Clinton Stevenson, director for investment manager engagement programs for CalPERS, said that CalPERS is not looking for a manager; instead, they are “looking for a partner.” He said CalPERS opened the solicitation for performance and for the investment opportunities it sees in the San Francisco Bay Area and New York City.
CalPERS is hoping to find a firm who will be investing in cash-generating, stable assets and have the inflation protection they need, said Stevenson. The pension fund can hire up to 15 transition managers across three assets classes: private equity, global equity and real estate.
Interested firms can apply starting Aug. 1 via the CalPERS website here. The final deadline for submissions is Sept. 7. CalPERS will review the applications throughout September and October and will choose a new manager or managers sometime in October.
CalPERS is seeking to generate appropriate risk-adjusted total returns with a long-term view with its new real estate portfolio manager(s). CalPERS investment portfolio is diversified into several asset classes, with real assets representing 13 percent and segmented among three distinct asset classes: real estate, infrastructure and forestland. To accomplish its real assets investment goals, CalPERS generally invests through externally managed private investment vehicles within three distinct strategies: core, value-add, and opportunistic. The new platform to invest with “Transition Managers” was established as a part of CalPERS’ commitment to emerging and early stages investment managers. CalPERS launched its Transition Manager Program in 2016 to fill the gap between emerging managers and the already distinguished managers.
“We think these strategies are a critical part of our external manager ecosystem,” said Stevenson. “We are trying to find firms that have performances with a total portfolio, firms that have a portfolio fit to fill the niche we are not covering, and find firms that have the potential to grow so we can grow with them.”
