CalPERS’ Tollette Wants to Eliminate Uncompensated Complexity

Photo Credit: CalPERS, Above, Wylie Tollette, CalPERS, Chief Operating Investment Officer, CalPERS HQ, Sacramento, CA, April 13, 2015

Photo Credit: CalPERS, Above, Wylie Tollette, CalPERS, Chief Operating Investment Officer, CalPERS HQ, Sacramento, CA, April 13, 2015

The California Public Employees’ Retirement System (CalPERS) had its investment committee meeting in which Wylie Tollette, CalPERS’ chief operating investment officer, reported his findings to the board. In the board meeting, Tollette touched on the pension system’s ongoing effort to rein in investment costs – an effort initiated by the late CalPERS CIO Joe Dear. 92% percent of CalPERS’ investment office expenses in fiscal year 2013-2014 stemmed from external management fees – US$ 1.617 billion. Personnel services for that period cost US$ 57 million versus consulting fees at US$ 21 million.

In addition, Tolette sees that having too many external managers in a given program makes things complex.

Reducing Costs, More Money for Returns

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