Tuesday, August 14, 2007

CalPERS Opens Investment Doors to Once-Prohibited Emerging Markets

A strategy that barred investments in politically troubled emerging market countries was scrapped Monday by trustees of the California Public Employees' Retirement System (CalPERS) according to this story from Plan Sponsor.com.

CalPERS had placed select emerging market countries - including Russia, China, Colombia, Egypt and Pakistan - off-limits to public equity investments based on country and market factors since 2002. However, the fund has now adopted a new principle-based policy to help guide managers in investing in these countries.

"Year by year, scores are improving, and many countries have responded to our standards for investing," said Rob Feckner, CalPERS Board President, in the press release. "These gains indicate that our permissible countries policy has improved business practices and addressed risk factors as well. Now it's time for a broader, more cost-effective approach."

A principles-based policy in lieu of a country list will result in cost savings of approximately $1 million a year in research services required to compile the list, according to CalPERS.