Attended the CalPERS Emerging Manager forum on Mon. Very interesting. No matter how you define "emerging manager", there is clearly a next generation of investment manager eager to get into the game. More on this later but key takeaways are:

1. CalPERS is reducing allocation to VC from 7% to 1% of portfolio over the next several years. This is still going to be a big number, but signals a retreat from VC.

2. Discussion on Micro-VC funds was notably absent, so much so that I had to raise the topic in the Private Equity forum. Microfunds are doing some of the best investing right now, and it's shame there wasn't some recognition of the unique characteristics of the class.

3. There are still a number of investment niches not adequately addressed by mainstream firms. These opportunity areas are where the alpha is going to come from in the future.

4. Elephant in the room, especially as per comments of reducing VC allocation, is how poorly a number of mainstream firms have performed. See here:

http://www.slideshare.net/tbjbuzzient/annual-investmentreport2011

If you go to pages 271/272 you'll see performance numbers for a number of firms. Some are absolutely dreary.

What's frustrating is that the selection process for EM's seems to be higher than the accountability for many of these firms. More on this later...