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Portfolio > Alternative Investments > Hedge Funds

CalPERS Hires Tokyo Hedge Fund, Seeks Emerging Managers

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SACRAMENTO, Calif. (–Roughly a year has passed since staff members for the California Public Employees’ Retirement System met with SPARX Asset Management officials in Tokyo.

At this month’s investment committee meeting, officials announced a $75 million initial allocation was made to the SPARX Blue Diamond Fund LP on Feb. 1 as part of the pension fund’s risk managed absolute returns strategies program. SPARX, along with other hedge fund firms in Hong Kong and Singapore, was on the CalPERS investment staff Asia tour last spring.

Tokyo-based Sparx Asset Management already handles a corporate governance portfolio for the $208 billion pension fund. SPARX manages 1.47 trillion yen (US$12.5 billion) of which about $440 million is in funds of hedge funds, with the bulk of the assets in Asian hedge funds, according to CalPERS’s meeting agenda materials.

The pension fund’s analysis of the firm says that SPARX has been managing Asian-oriented funds of hedge funds for nine years and that the firm has access to top-quality managers that have closed their offerings to new investors.

Still Searching

The manager search is ongoing at CalPERS, and officials there have partnered with Altura Capital to build a database of emerging managers and financial service providers for use by a larger group of institutional investors. Hedge funds and funds of hedge funds will be included in the database that is being kept in conjunction with the California State Teachers’ Retirement System.

Investment firms have 90 days to review the participation criteria and complete an online questionnaire free of charge at The deadline to join is July 17 and the database will be distributed to participants, plan sponsors, endowments, corporations and other institutional investors.

Last fall CalPERS indicated interest in allocating to newer hedge fund firms. Trustees approved five firms–Strategic Investment Management, Progress Colchester Ventures LLC, The Rock Creek Group, Bear Stearns Asset Management and Legato Capital–as part of an emerging manager program that lets advisers allocate assets to specific funds and then negotiate an additional equity stake.

“We recognize that diversity is a competitive advantage in business and for our investment portfolio,’ said Anne Stausboll, CalPERS interim chief investment officer, in a statement on the Altura project. “This database will help us to identify and track new and emerging investment talent.”

New CIO in June

Ms. Stausboll will step aside on June 1 for Russell Read, who will take over as chief investment officer for the nation’s largest pension fund. Mr. Read replaces Mark Anson, who left CalPERS in January to join Hermes Pension Management Ltd. in London.

Mr. Read is the former deputy chief investment officer for Deutsche Asset Management and Scudder Investments. He was responsible for more than $250 billion for retail and institutional investors in equity, fixed-income and commodity-based products.

He will now oversee 180 investment employees and a diversified portfolio that includes equities, fixed income, alternative investments and real estate. He currently is the socio-economic advisor for the Forest BioProducts Research Project at the University of Maine and serves on the finance committee of the Fractional Development Center, a group dedicated to the transformation of wood into energy and materials currently provided by crude oil.

Contact Bob Keane with questions or comments at [email protected].


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