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Private Equity Allocations are Higher, and So is Demand for Fewer Names

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The California Public Employees’ Retirement System (CalPERS) is seeking to narrow the number of private equity managers they deal with. 389 managers are in the pension’s US$ 42 billion private equity program, CalPERS wants to chop that number down to less than a third. On December 16, Réal Desrochers, senior investment officer of the private equity program at CalPERS, told the pension investment committee of their goal to dwindle down to around 120 managers. The ex-CalSTRS private equity allocator believes having fewer private equity relationships would allow the pension to better monitor strategies. The slim down strategy encompasses making more concentrated plays with high-performing general partners versus massive diversification, essentially mimicking a private equity index. This strategy is being reflected by U.S. pensions like California State Teachers’ Retirement System (CalSTRS) and the Teacher Retirement System of Texas (TRS). TRS already inked strategic relationships with KKR and Apollo Management. In 2011, the TRS had around 111 relationships in their private markets portfolio – much smaller than CalPERS.

This strategy of reducing the number of relationships with private equity and other asset managers has blossomed.

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Capital Constellation Backs Middle Market PE Platform

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Capital Constellation is the investment platform owned by the Alaska Permanent Fund Corporation (APFC), RPMI Railpen, and Wafra Inc. on behalf of the Public Institution for Social Security of Kuwait (PIFSS). [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Canadian Pension Giants Could Support Trans Mountain Pipeline Deal

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The British Columbian (B.C.) government and indigenous groups publicly oppose the Trans Mountain Pipeline project over a number of issues, which include environmental concerns (potential pipeline spills) and land protections. The threat of project derailment sent jitters to Houston-based Kinder Morgan, Inc., requiring the company to halt non-essential spending on Trans Mountain Pipeline L.P. Calgary-based Kinder Morgan Canada Limited, which owns the pipeline, is a listed company that is 70% owned by Kinder Morgan and 30% owned by stock market investors (float). Kinder Morgan Canada hired TD Securities to explore options regarding the future of the pipeline.

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Goldman Sachs Poised to Name David Solomon as New CEO

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Goldman Sachs is poised to name David M. Solomon, the firm’s president, as its new CEO, replacing Lloyd C. Blankfein. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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