CalPERS names ex-SAFE executive as CIO

Meng had a seven-year stint with CalPERS, latterly serving as an investment director for asset allocation, prior to joining SAFE. The nature of his duties at the Chinese government agency, which is responsible for the country’s more than $3 trillion in foreign exchange reserves, is unclear. Prior to CalPERS, Meng worked for Barclays Global Investors, Lehman Brothers, and Morgan Stanley.

Born in China but a US citizen, Meng will oversee an investment office of nearly 400 employees that manages a $360 billion portfolio comprising public and private investments. His start date has yet to be determined, according to a statement. He is replacing Ted Eliopoulos, who has held the CIO position on a permanent basis since 2014 and had earlier agreed to remain in place until a successor was named.

As of July, CalPERS had $27.3 billion invested in private equity, compared to $31.9 billion in real estate, $4.35 billion in infrastructure, and $1.55 billion in forestland. It has exposure to Asia-focused vehicles managed by a range of PE firms, including Asia Alternatives, Affinity Equity Partners, The Carlyle Group, CDH Investments, KKR, PAG Asia Capital, and TPG Capital.

Earlier this year, the pension fund announced plans to deploy up to $13 billion a year in direct private equity deals through two newly formed funds – one of which will concentrate on late-stage investments in technology, life sciences, and healthcare, while the other makes commitments to established companies. These investments will be made by CalPERS Direct, a separate entity that will operate alongside the existing private equity program that primarily makes fund commitments.

The direct investment strategy could be seen to reflect concerns about the relatively high cost of participating in private equity through management and performance fees paid to third-party managers. CalPERS has already initiated plans to further reduce its number of GP relationships, with plans to have $30 billion deployed with just 30 managers by 2020.

For the previous financial year, ended June 2017, private equity delivered a 13.9% one-year return, trailing only the public equity portfolio, which recorded 19.6%. The total fund return was 11.2%. However, private equity is CalPERS’ best-performing asset class on a five-year and a 10-year basis, generating 9.3% and 10.6%, respectively.

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• Topics
• North America
• Greater China
• LPs
• People
• California Public Employees' Retirement System (CalPERS)
• Appointments
• SAFE