SACRAMENTO, CA, September 27, 2012 – The California Public Employees’ Retirement System (CalPERS) has selected Canyon Capital Realty Advisors (Canyon) to run its new $200 million Emerging Manager Program for Real Estate.
The selection of Canyon marks one of the first actions under a new plan recently released by CalPERS outlining the pension fund’s commitment to improve and strengthen its relationships with emerging managers.
Through the new Canyon Catalyst Fund, CalPERS and Canyon will seek up to six managers who have less than $1 billion of assets under management and no more than three prior commingled funds or separate account investment vehicles. The Program will focus on managers and assets in urban California markets. Canyon will leverage its expertise as an established investment firm and mentor the emerging managers to ensure incorporation of best-in-class practices.
“Achieving appropriate risk-adjusted earnings must always be our primary objective,” said Joe Dear, CalPERS Chief Investment Officer. “But we also hope that this program will lead us to new investment opportunities in California and increase diversity among our pool of real estate investment managers.”
Approved by the CalPERS Board of Administration in August 2011, the Program will run for five years. CalPERS staff will provide an annual progress report to the Investment Committee. Upon completion of the Program, staff will evaluate the outcome and consider the feasibility of a second phase.
“Canyon’s extensive experience and proven track record in urban investing make them a great fit to lead this program,” said Ted Eliopoulos, Senior Investment Officer for CalPERS real estate program. “We’re excited to work with them to develop the next generation of real estate managers.”
CalPERS Five-Year Emerging Manager Plan seeks to strengthen the fund’s investment performance, enhance relationships with emerging managers and improve implementation of emerging manager investment strategies.
“We remain dedicated to equality of access and opportunity, and will continue fostering the growth of emerging managers and creating opportunities for them,” said Dear.
CalPERS has a well-known legacy as a leader in providing opportunities to manage our assets by seeking the broadest possible pool of talent from emerging managers. Following the global market collapse in 2009, for example, emerging managers received 18 percent of the capital commitment to external managers for the CalPERS private equity program. This is the same level that was provided during the boom years before the market collapse. Our commitment is steadfast and continues, even in these volatile economic times.
In the last three years, CalPERS has committed approximately $1 billion to emerging manager strategies in the areas of private equity, global equity, hedge funds and real estate including the fund to be managed by Canyon Capital.
Currently, CalPERS has $9.7 billion invested with more than 300 emerging managers, representing more than 11 percent of our externally managed capital.
CalPERS Emerging Manager Plan can be found in its press room at www.calpers.ca.gov.
CalPERS is the nation’s largest public pension fund, with approximately $240 billion in assets. It administers retirement benefits for more than 1.6 million active and retired California state, public school, and local public agency employees and their families on behalf of more than 3,000 public employers; and health benefits for more than 1.3 million enrollees.