New CalPERS CEO Eyes Private Equity Boost

New CalPERS CEO Marcie Frost, who was picked on Thursday amid strong endorsements from colleagues, didn’t waste time revealing bits of her thinking on the fund’s investment strategy.

Frost said private equity is an important part of the fund’s portfolio in this environment, and CalPERS might consider increasing its PE allocation to meet return targets. She also acknowledges valid criticisms of the asset class, including fee disclosure.

Frost takes her post on October 3.

From Bloomberg:

The new chief executive officer of the California Public Employees’ Retirement System said the largest U.S. pension fund may look to add more investments in private equity and real estate to increase returns and close its unfunded liability.

“When you’re looking at the low rate of return environment in the public markets, I don’t think you can ignore private equity,” Marcie Frost, who was named Thursday as the pension fund’s next CEO, said in a telephone conference with reporters. “This could be a low-rate environment for a period of time and we have to factor that in when we do our allocation work.”

[…]

Private equity managers, Frost said, have faced valid criticism in recent years for high fees and lack of transparency.

“The transparency — the full disclosure — is a very important piece of that,” she said. “Calpers has been a very strong leader in that area.”