The California Public Employees' Retirement System (CalPERS) has awarded a $500m mandate to Standard Life Investments as part of its multi-asset class (MAC) partners programme.

Standard Life is the first of four external managers selected to partner with CalPERS in the MAC programme.

The first aim of the programme is to outperform the CalPERS total fund by primarily using public market assets and doing so with lower volatility and less risk.

The second aim is to cultivate the sharing of information between MAC partners and CalPERS investment staff and to help develop sustainable and efficient methods of increasing the likelihood of meeting long-term CalPERS investment return goals.

"We're excited to have Standard Life on board as our first partner," said Joseph Dear, CalPERS chief investment officer. "Standard Life's approach presents us with an excellent opportunity to add value to our portfolio, and to our investment operations by bringing in an outside perspective as we work toward our long-term investment goals."

Standard Life's investment approach for the MAC fund is modelled on its global absolute return strategy (GARS), which is based on a three-year market view and aims to take advantage of inefficiencies caused by short-term investors.

"What is really exciting about the partnership is the knowledge exchange element of the program, and strong alignment of our interests with those of CalPERS and its participants. We look forward to a long and successful relationship," said Standard Life chief executive officer Keith Skeoch.

First published 26.03.2013

monique_simpson@wilmington.co.uk