CalSTRS Ailman on California's New Fee Disclosure Law

The transcript discusses a new disclosure law affecting fees paid by public pension systems to private equity and hedge funds. CalPERS CIO Chris Ailman explains the law's impact on investment models, emphasizing the need for transparency in fee disclosure. The conversation covers the challenges of achieving expected returns in private equity, the importance of diversification, and strategies for future investments. The discussion highlights the evolving landscape of private equity returns and the necessity of adapting investment strategies to meet long-term targets.

What is the primary focus of the new disclosure law discussed in the video?

• Enhancing pension fund returns

• Disclosing fees paid to private equity and hedge funds

• Reducing taxes on pension funds

• Increasing investment in public equities

Why is there a push for more transparency in investment management costs?

• To increase the number of investors

• To better understand the costs involved

• To eliminate management fees

• To reduce the number of hedge funds

How has the expectation for private equity returns changed over the years?

• From 20% to middle teens

• From 30% to 50%

• From 10% to 30%

• From 5% to 15%

What is the current allocation target for private equity in CalPERS?

• 20%

• 13%

• 9%

• 5%

What is one of the challenges mentioned in achieving the private equity allocation target?

• Low investor interest

• High interest rates

• Long investment cycles

• Lack of available funds

Which asset class is mentioned as having a better chance of making money in the future?

• Government bonds

• Real estate

• Public equities

• Private assets

What is emphasized as critical for portfolio management in the current economic climate?

• Single asset focus

• Diversification

• High-risk investments

• Short-term gains