Industry Updates

CalPERS to invest $500m in Standard Life’s Global Absolute Return Strategies

Friday, March 22, 2013

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Opalesque Industry Update: The California Public Employees’ Retirement System (CalPERS) is investing $500M with Edinburgh, Scotland-based Standard Life Investments as part of its Multi-Asset Class (MAC) Partners Program.

Standard Life is the first of four external managers selected to partner with CalPERS in the MAC program.

“We’re excited to have Standard Life on board as our first partner,” said Joseph Dear, CalPERS Chief Investment Officer. “Standard Life’s approach presents us with an excellent opportunity to add value to our portfolio, and to our investment operations by bringing in an outside perspective as we work toward our long-term investment goals.”

Standard Life’s investment approach for the MAC fund is modeled on their Global Absolute Return Strategies (GARS) approach. GARS is based on the key beliefs that marginal investors have a short-term time horizon which leads to market inefficiencies, and that by taking a three-year market view, those inefficiencies can be taken advantage of to create positive investment outcomes.

"This innovative relationship, the first of its kind, presents a great opportunity for Standard Life Investments to work closely with the CalPERS investment team,” said Keith Skeoch, CEO of Standard Life Investments. “What is really exciting about the partnership is the knowledge exchange element of the program, and strong alignment of our interests with those of CalPERS and its participants. We look forward to a long and successful relationship.”

The MAC Program has two strategic objectives. First, the Program is intended to outperform the CalPERS total fund over a market cycle, using primarily public market assets, and doing so with lower volatility and less risk.

Secondly, the Program is expected to facilitate a transfer of meaningful information from the MAC Partners to CalPERS investment staff, to help develop scalable, sustainable, and efficient methods of increasing the likelihood of meeting long-term CalPERS investment return goals.

CalPERS

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