CalPERS and its biggest investment partner, New York's Apollo Global Management, are announcing this afternoon a "new strategic relationship" which will eliminate the use of placement agents and lead to a "substantial reductions" in fees -- $125m worth -- payable to Apollo, which currently handles $5bn in CalPERS funds.

According to a CalPERS press release, the two entities " believe that the agreement will set a new standard among pension funds and their investment advisers."

What that means is that CalPERS will be using the agreement as a template to renegotiate arrangements with its other investment partners -- including the elimination of placement agents.