US pension funds in activism hiring spree

US public pension funds are making a concerted drive into corporate governance activism with a slew of mandates being awarded to specialist fund managers.
The $45bn (€33bn) New York City Employees Retirement Scheme (NYCERS), is the latest to announce hires. It has mandated Breeden Capital Management, the US activist firm run by former SEC chairman Richard Breeden, to run money alongside Knight-Vinke, Hermes, and Governance for Owners. The exact terms of the mandates have not yet been disclosed.
London-based Governance for Owners (GO) has also won new mandates totalling €330m ($485m) from the $173bn California State Teachers’ Retirement System (CalSTRS) and the $11.1bn Los Angeles City Employees’ Retirement System (LACERS), as well as additional funds from an existing client. The wins bring the total funds available to the GO European Focus Funds to €1 billion ($1.5bn) from 11 institutional clients.
As a result of the wins, GO has added Hélène Jelman, former chief investment officer and principal atArlington Capital Investors, the London-based European activist fund management firm, to its own team as an investment director.
It has also appointed French business luminary André Lévy-Lang, former chief executive of Paribas, the French bank, to its advisory board.
Peter Butler, founding partner and chief executive officer at GO, said, “We are delighted to have attracted investments from two more leading California pension funds. There is a growing commitment to the shareholder engagement asset class, particularly in the USA, and our marketing pipeline is stronger than ever.”
The NYCERS mandates finalise a raft of hires for responsible investment managers at the fund, which runs the pensions of more than 300,000 of New York’s municipal workers. At the end of 2007, it hired Generation Asset Management, F&C Asset Management, Walden Asset Management, and KBC Asset Management to its manager roster for a mix of SRI global equities, US small caps and renewable energy mandates.