Sep 8, 2017

CalPERS considers outsourcing private equity to BlackRock

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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Trump rules out quarantine in New York, New Jersey, Connecticut after pushback

President Trump on the White House grounds on Saturdya. Photo: Sarah Silbiger/Getty Images

President Trump tweeted Saturday night that he's decided not to introduce quarantine enforcement measures fo New York, New Jersey and parts of Connecticut, but a "strong" travel advisory will be issued for those states.

Why it matters: The president said hours earlier he was considering the move to combat the rise in novel coronavirus cases. But he received pushback, most notably from New York Gov. Andrew Cuomo (D), who told CNN it would cause "chaos." "This would be a federal declaration of war on states," Cuomo added.

Go deeper: Updates on coronavirus in the U.S.

Trump weighs quarantine of New York, New Jersey, Connecticut

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios

President Trump said Saturday he's considering a short-term quarantine of New York, New Jersey and parts of Connecticut, which have already taken steps to help residents isolate. Gov. Andrew Cuomo reacted to Trump's comments by telling CNN, "This would be a federal declaration of war on states" and that it would cause "chaos."

The big picture: With more than 121,000 people infected, the U.S. has the most COVID-19 cases in the world, exceeding China and Italy, per data from Johns Hopkins. A second wave of American cities, including Boston, Detroit, New Orleans and Philadelphia, are reporting influxes of cases.

Go deeperArrowUpdated 37 mins ago - Health

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 7:30 p.m. ET: 660,706 — Total deaths: 30,652 — Total recoveries: 139,304.
  2. U.S.: Leads the world in cases. Total confirmed cases as of 7:30 p.m. ET: 121,478 — Total deaths: 2,026 — Total recoveries: 1,072.
  3. Federal government latest: President Trump is considering a quarantine on New York, parts of New Jersey and Connecticut.
  4. State updates: Alaska is latest state to issue a stay-at-home order — New York is trying to nearly triple its hospital capacity in less than a month and has moved its presidential primary to June 23. Some Midwestern swing voters that supported Trump's handling of the virus less than two weeks ago are now balking at his call for the U.S. to be "opened up" by Easter.
  5. World updates: In Spain, over 1,400 people were confirmed dead between Thursday to Saturday.
  6. 🚀 Space updates: OneWeb filed for bankruptcy amid the novel coronavirus pandemic.
  7. Hollywood: Tom Hanks and Rita Wilson have returned to U.S. after being treated for coronavirus.
  8. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk
  9. Other resources: CDC on how to avoid the virus, what to do if you get it.

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