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CalPERS, the country's largest public pension system, is officially seeking an outside firm to help manage its $26 billion private equity portfolio. We had last discussed this in September as a head-scratching possibility, with BlackRock among the likely applicants.

Bottom line: Never mistake big money for smart money.

  • This could cause some déjà vu for those old enough to recall CalPERS in the dotcom days, when it hired an outside firm to manage venture capital (before not only killing off the agreement, but VC investment altogether... at the next cycle's best buy-in point).
  • Hiring an outside manager would seem to be an exercise in increasing private equity management fees by a public pension that has made cutting such fees a cornerstone of its recent investment strategy (sometimes at the expense of accessing quality funds).
  • Finalists will be interviewed in March and April.
  • It also raises even more questions about what CalPERS will do with the slew of PE investment staffers it hired over the past couple years. These folks mostly have sat on their hands as the pension has sought to slash its number of GP relationships, and now they'll sit on their hands as an outside firm does the work.
  • Calpers currently has an 8.9% allocation to private equity, which is above its 8% target allocation. The current $26 billion size expands to more than $40 billion if unfunded commitments are taken into account.

Go deeper

Trump political team disavows "Patriot Party" groups

Marine One carries President Trump away from the White House on Inauguration Day. Photo: Patrick Smith/Getty Images

Donald Trump's still-active presidential campaign committee officially disavowed political groups affiliated with the nascent "Patriot Party" on Monday.

Why it matters: Trump briefly floated the possibility of creating a new political party to compete with the GOP — with him at the helm. But others have formed their own "Patriot Party" entities during the past week, and Trump's team wants to make clear it has nothing to do with them.

DOJ watchdog to probe whether officials sought to alter election results

Donald and Melania Trump exit Air Force One in West Palm Beach, Fla., on Jan. 20. Photo: Alex Edelman/AFP via Getty Images

The Justice Department's inspector general will investigate whether any current or former DOJ officials "engaged in an improper attempt to have DOJ seek to alter the outcome" of the 2020 election, the agency announced Monday.

Driving the news: The investigation comes in the wake of a New York Times report that alleged Jeffrey Clark, the head of DOJ's civil division, had plotted with President Trump to oust acting Attorney General Jeffery Rosen in a scheme to overturn the election results in Georgia.