The news that CalPERS had decided to flex its muscles when dealing with alternative investment shops is hardly a surprise. The bigger surprise is what took so long. The litany of requests about fees, time frames, clawbacks and disclosure are important, but one idea really stands out: The idea of managed accounts. Such accounts make a lot of sense. When you are that big why not demand your own account, which would separate you from the ups and downs caused by redemptions from other clients.

The consequences are potentially far-reaching. Suppose all pensions started asking for such accounts. At some point, you could see some funds really making marketing in-roads with the idea. We may see this really take off. It's fair to say that if CalPERS prevails on this, lots of pensions would want to follow suit. The issue is how hard would it be for hedge funds to transition to managed accounts and would they be willing to live with the enhanced disclosure that such accounts would bring. 

For more:
- here's some background from Reuters

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