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BlackRock CEO Larry Fink. Photo: AP/Mark Lennihan

CalPERS, the nation's largest public pension, is in early talks to outsource management of its $26 billion private equity investment portfolio to BlackRock. Bloomberg was first with the news, which Axios has since confirmed.

Why it matters: The CalPERS pension fund serves more than 1.8 million members, so strong investment returns are imperative. It's no longer private equity's 800 lb gorilla in terms of influence, but that $26 billion can still rattle big cages.

Hold your horses: These talks are early, and have included discussions of BlackRock managing everything from a sliver of the CalPERS portfolio to the whole enchilada.

Seriously, hold em: Covering CalPERS and private equity sometimes feels like an exercise in mental whiplash. Sometimes it's very hot on outside managers, then it bails on them in favor of building out a large internal investment team. But it also saddles that team with a boss whose anti-fee fervor slows down the new investment pace to a trickle, thus giving these new hires little to do. But then that boss resigns six months ago (still no word on a permanent replacement), and the board begins publicly considering an in-house direct private equity program that mirrors its Canadian peers (which would likely require salaries that would be catnip to Sacramento Bee editors). And it publicly lauds the private equity team it now might outsource. Oh, and CalPERS spent a fortune on an internal fee reporting system that could have been preempted had someone just bought Excel for Dummies. My neck hurts, and I honestly had to leave a lot out for the sake of space.

Notable: BlackRock's current alternatives boss is Mark Wiseman, who helped pioneer the Canadian direct model while CEO of Canada Pension Plan Investment Board.

Data disclosure: CalPERS is about a quarter behind on its publicly-reported data, but here is the private equity portfolio through year-end 2016.

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Democrat Mark Kelly sworn in to U.S. Senate

Photo: Courtney Pedroza/Getty Images

Astronaut Mark Kelly (D) was sworn in to the U.S. Senate on Wednesday after defeating incumbent Sen. Martha McSally (R-Ariz.) last month for the seat once held by the late Sen. John McCain.

Why it matters: Kelly's swearing-in by Vice President Mike Pence narrows the Republican majority and moves the Senate balance to 52-48.

Senate Armed Services chair dismisses Trump threat to veto defense bill

Sen. Jim Inhofe. Photo: Anna Moneymaker/Pool/AFP via Getty Images

Sen. Jim Inhofe (R-Okla.), chair of the Senate Armed Services Committee, told reporters Wednesday that he plans to move ahead with a crucial defense-spending bill without provisions that would eliminate tech industry protections, defying a veto threat from President Trump.

Why it matters: Inhofe's public rebuke signals that the Senate could have enough Republican backing to override a potential veto from Trump, who has demanded that the $740 billion National Defense Authorization Act repeal Section 230 of the Communications Decency Act.

Scoop: Uber in talks to sell air taxi business to Joby

Illustration: Sarah Grillo/Axios

Uber is in advanced talks to sell its Uber Elevate unit to Joby Aviation, Axios has learned from multiple sources. A deal could be announced later this month.

Between the lines: Uber Elevate was formed to develop a network of self-driving air taxis, but to date has been most notable for its annual conference devoted to the nascent industry.