The California Public Employees’ Retirement System (CalPERS) will be bringing back consulting firm Lenox Park Solutions to help the fund collect data on the diversity of the external asset management firms it uses.
“What Lenox Park is able to do, which is so valuable, is it allows us to benchmark progress over time and also benchmark ourselves against our sister pension funds,” said Anne Simpson, managing investment director of board governance and sustainability for CalPERS, at the fund’s board meeting on Tuesday.
This is not the first time CalPERS has used Lenox Park. The $495 billion pension also used the company’s metrics last year to measure the diversity of its general partners (GPs). The consulting firm uses an index number called an LPI (Lenox Park Impact Score) to compare different managers’ levels of diversity and inclusion. It measures diversity at all levels of a firm, from its junior staff to its owner.
Currently, the LPI focuses on gender, race, ethnicity, veteran status, and disability. However, CalPERS is also discussing the possibility of working with Lenox Park to add further categories for gender identity and sexuality.
This move is ultimately part of CalPERS’ larger goal of investing in emerging managers to further promote diversity. CalPERS has currently committed more than $9 billion to first and second institutional funds. The pension is also considering expanding its emerging manager program into global fixed-income assets and other strategies.