CalPERS invests locally in Golden State

The California Public Employees’ Retirement System (CalPERS) has made a $400 million commitment to funds-of-funds manager Centinela Capital Partners as part of its effort to invest more capital with emerging managers—particularly thoses that invest in California.

Centinela intends to invest with private equity firms active in leveraged buyouts, expansion capital and venture capital. The firm expects to begin investing by the end of the year and to commit capital over the next four years.

Centinela operates out of New York and California and is the brainchild of Cesar Baez, who most recently oversaw alternative investments for Deutsche Bank Asset Management. He is also the former head of alternative investments for the State of New Jersey Division of Investments.

The Centinela commitment is part of the pension fund’s California Initiative, which it launched in 2001 as an effort to reach a more diversified pool of general partners and to invest capital in underserved urban and rural areas in California. Two weeks before announcing the Centinela commitment, CalPERS announced a $500 million commitment to Hamilton Lane as part of the same initiative.

Half of that $500 million has been allocated for California-based private equity funds; the other half is earmarked for direct co-investments in California-based companies. Hamilton Lane, a long-time manager of CalPERS funds, is overseeing these investments from its San Francisco office.