CalPERS says it launched its emerging manager program in 1991. But the effort has fallen under the same pressures facing traditional managers: the need to produce acceptable gains. “In past three months we reduced traditional external managers from $30-plus billion to $5 billion — from 17 managers to three,” Frost said in the memo. Traditional managers have underperformed their benchmarks by 48 basis points over the past five years net of fees, and emerging managers by 126 basis points, according to Frost. The reduction in managers will save $100 million annually, according to Frost’s memo: $80 million from traditional managers and $20 million with emerging firms.

Source: Los Angeles Times December 04, 2019 21:33 UTC