FTSE has become the sole index provider for $160bn US superfund CalPers’ $36bn in international equities.
CalPers – the retirement fund for the public employees of California, previously employed a number of different benchmarks for its overseas assets - using FTSE for a number of the developed markets, MSCI for an active fund and IFC for emerging markets.
Following a review of its international investment arrangements, CalPers decided on exclusive use of FTSE overseas, noting that a large part of the money was already benchmarked on a passive basis against FTSE indices.
Mary Cottrell, senior principal investment officer at CalPers, comments: “ I was asked to look at how CalPers was doing all its international investing and make recommendations.
“ As part of that review I told the investment committee that their passive and active international equity investment should be on one benchmark.”
“ So I told them that as they had the bulk of the money indexed to FTSE that this was the benchmark they should go with.”
While the decision was made in principle some time ago, Cottrell says that the announcement ties in with the hiring of new asset managers to international asset classes by CalPers, with the transfer of assets currently taking place.
The fund recently selected AXA Rosenberg, Bank of Ireland Asset Management and Capital Guardian International to mandates of approximately $500m each in active equity briefs.
Mark Makepiece, managing director at FTSE International, notes the significance of the win: “ CalPers is very influential because they are a trend setter and they are also huge.
“ It’s a great success – to win this in America.
The CalPers selection comes on the back of a decision by the Hong Kong Investment Fund Association to choose FTSE as the benchmark for managers running the country’s new individual mandatory provident funds, with an inflow of assets estimated at $12bn per annum.