GLOBAL – The $127bn (€97bn) California teachers fund CalSTRS is to launch a search for up to six active equity managers to invest about $3bn in emerging markets, or 10% of its international equity portfolio.

The California State Teachers' Retirement System said funds for the shift would come from “normal cash flow”. The search begins on April 20 and the deadline is June 7. Selected managers will be announced in the autumn.

The Sacramento-based fund, the third-largest public pension fund in the US, said the move follows an “extensive study of the opportunities and risks in investing in emerging markets”.

The decision represents a shift from its current policy of making emerging market investments on an “opportunistic basis” through its existing managers.

"This new program will provide us additional diversification in the international marketplace," said the scheme’s director of global equities, Elleen Okada.

“The investment committee has gone through a comprehensive effort to craft an excellent emerging market program. It will ensure we achieve the best return on our members' funds while considering the attendant risks in this investment category."

Elsewhere, fellow Californian fund CalPERS has also made announcements regarding emerging markets.

It said it has added Argentina, Sri Lanka, Thailand and Turkey to its list of permissible emerging equity markets. The action was based on a report from its pension consultant Wilshire Associates.

CalPERS will not permit equity investments in Colombia, China, Egypt, Morocco, Pakistan, Russia, Venezuela and Indonesia.