Faced with huge shortfalls, America’s public pension funds are doing what so many others do when things go wrong: they are blaming Wall Street.
The California Public Employees’ Retirement System, America’s biggest state pension fund managing assets of more than $300 billion on behalf of school administrators, firefighters and other state employees, said last week that it would sever ties with more than half of the firms handling its money. That sent a shiver through the money management industry.
Intent on cutting costs, risks and complexity, Calpers wants to reduce its number of outside managers from 212 to about 100, increasing competition among those vying for its business.
“We are going to have fewer relationships with managers, but more meaningful ones,” a Calpers spokesman said.