The California Public Employees’ Retirement System selected Pacific Corporate Group (PCG) to manage a $400 million cleantech fund and a $400 million emerging market fund.
The cleantech program will augment CalPERS’ existing program, which has committed $200 million to seven general partners. The pension fund will be the anchor investor in PCG’s cleantech fund, which will seek money from other institutions.
“We have had a long-standing relationship with PCG in which it has consistently generated outstanding returns for our system,” says Leon Shahinian, senior investment officer with CalPERS’ Alternative Investment Management Program.
The emerging market fund will focus on investments in Eastern Europe, Latin America and Asia.
CalPERS expects the two PCG-run funds to register performance consistent with the rest of its Alternative Investment Management program, which has more than $33 billion in active commitments and has generated $9 billion in profits for CalPERS. The AIM program returned 14.5% for the commitments it made during 2001, the most recent year for which the pension fund feels it has meaningful returns, according to CalPERS’ documents.
The AIM program has increasingly turned to middlemen to pick the general partners it backs. But the choice of PCG may come as a surprise to some. The firm lost five of its managing directors last fall. Monte Brem, Tara Blackburn and Steve Moseley left in September over compensation issues. David Scopelliti and Tom Keck followed in December. The departures led the Teachers’ Retirement System of the State of Illinois to issue a request for proposals for a new private equity consultant in December.