Ben Meng, a former CalPERS portfolio manager who now works for the Chinese government foreign exchange office, has been offered the job as the California pension system’s chief investment officer and is in negotiations over his compensation, sources say.
“No candidate has accepted an offer,” Megan White, a spokeswoman for the largest US pension, told CIO in an email. She declined to comment further.
If Meng successfully completes negotiations with CalPERS management, he would replace Ted Eliopoulos, who announced in the spring that he would leave CalPERS by the end of the year.
Back in June, the CalPERS board approved a change that would allow the pension system to increase the top yearly compensation of the CIO, including bonuses, to as much as $1.77 million, up from the maximum $1.1 million Eliopoulos could have earned.
Meng was well-liked by CalPERS investment staffers during his tenure from 2008 to 2015, sources say. Meng started as a portfolio manager in the $357 billion plus pension system’s fixed income asset class in 2008. He was promoted to head of asset allocation for the fund in 2012.
Meng joined the Chinese government in 2015 as deputy CIO of China’s State Administration of Foreign Exchange, which handles foreign currency reserves of more than $3 trillion.
CalPERS is planning to hire a new CIO at a crucial time. The pension plan is expected to launch a $20 billion private equity direct investment organization, the first of its kind by a US pension plan, within the next few months.
At the same time, pension plan officials acknowledge that it may be difficult to even meet the plan’s 7% rate of return, which has been lowered from 7.5%, over the next decade.
CalPERS officials and its consultants estimate an annualized rate of return for the next decade of around 6.2%, though they say they believe CalPERS can earn the 7% rate of return annualized over the next 30 years.
In choosing Meng, CalPERS officials decided to hire someone with extensive investment experience, including tenure on Wall Street. Meng worked at several Wall Street firms before joining CalPERS in 2008.
Eliopoulos and his predecessor, Joseph Dear, were more known for their management experience than their investment expertise.