Gillian Tan, Columnist

Calpers Risks Going the Wrong Way

Handing off the investments to a third party like BlackRock may lower fees, but jeopardize returns in the process.

September 8, 2017 at 6:29 PM UTC

Gillian Tan is a senior reporter covering finance and alternative asset classes including real estate, infrastructure, private equity, private credit, venture capital and sports business. She previously wrote an opinion column for Bloomberg and was a reporter at the Wall Street Journal. She is a qualified chartered accountant.

1504898312_GettyImages-3143417 — Photographer: Ward/Hutton Archive/Getty Images

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If the reach for lower fees compromises returns, is it worth it? That's a question Calpers should consider.

As Bloomberg News reported late Thursday, the California Public Employees’ Retirement System is in discussions with BlackRock Inc. about managing some or all of its $26.2 billion in private equity investments. It's still unclear how any arrangement would be structured, but BlackRock's management of with Swiss Re's private equity assets suggests Calpers's platform could be managed by the investment firm's fund-of-funds group.1504893939216