The University of California’s office of the treasurer of the regents, the school’s governing body which is responsible for a $71.5bn portfolio of retirement and endowment funds, is increasing its allocation to emerging and frontier market funds, including  Mena, within its public equity programme.

The university is in the process of completing due diligence on managers who focus on India or Russia, and is evaluating prospects for investing with regional managers in markets such including the Middle East and Africa,  according to the minutes of a recent investment committee meeting.

During the meeting, senior managing director of public equity, William Coaker, stated that “managers with a narrow focus were better able to identify inflection points, earning points, secular trends, the impact of legislation, the political environment, and emerging companies better and earlier than were globally diversified managers”.

Overall, the university’s public equity department intends to reduce the number of globally diversified managers. Coaker’s strategy for the emerging markets equity portfolio going forwards is to, “increase exposure to companies doing more business in their own countries or other emerging market countries, rather than companies exporting to the United States or Europe” and to “emphasize a broad array of emerging market consumer and infrastructure themes, increase active share and tracking error, emphasize highest conviction managers, eliminate over-diversification, and use managers with specialty or niche strategies” according to the minutes.