CalPERS backs emerging managers

The California Public Employees’ Retirement System added $350 million to its emerging managers investment allocation in February, as it announced that it backed fund of funds FIS Group and public equity investor Redwood Investment Management.

The state pension fund defines an emerging manager as a firm with less than $2 billion of total assets under management.

CalPERS invested $150 million in FIS Group, an emerging fund of funds. The Philadelphia-based firm has already invested in nine funds, including Atlanta Life Investment Advisors, Paradigm Asset Management Company, AH Lisanti Capital Growth, OakBrook Investments, DSM Capital Partners, Mastrapasqua Asset Management, Moody Aldrich Partners and Rushmore Investment Advisors.

Five of the nine investments FIS Group has made so far are in either African American-owned firms or women-owned funds, according to the CalPERS statement.

“FIS will give us access to a larger number of skilled emerging firms to generate solid investment returns and reflect the diversity of the market,” CalPERS Chief Investment Officer Russell Read said in a prepared statement.

The $200 million that CalPERS invested in Redwood Investment Management is part of the pension fund’s Manager Development Program II and the program’s second investment to date. The state pension fund’s previous investment through the program was a $100 million injection into Piedmont Investment Advisors in March 2006. —Alexander Haislip