A $600 Billion Experiment Kicks Off at Biggest US Pension Fund

Stephen Gilmore’s 40-year tour of global finance has given him a front-row seat to the Russian debt crisis, the bailout of a financial giant and the rise of sovereign wealth funds. It’s also taken him to a war zone. As the International Monetary Fund’s representative in Tajikistan in the 1990s, Gilmore hunkered down in his office for three days as a militia advanced on the capital city of Dushanbe.

Now he has what many consider the hardest job in investing. Gilmore runs the $600 billion portfolio of the California Public Employees’ Retirement System, the largest pension fund in the ...