FORTUNE -- A running joke in private equity circles is how the California Public Employees' Retirement System (CalPERS) has become the industry’s invisible 800 lb. gorilla, having made just a small handful of new fund commitments since Real Desrochers took over the program early last year. Seems the pension giant has been driving a very hard bargain on fees, causing even some of its longtime general partners to seek capital elsewhere.
Some other day we’ll discuss whether this is smart strategy, or if its penny-wise/pound-foolish.
For today, some related scoop: CalPERS is in the final stages of negotiating a large, custom-managed account with The Blackstone Group (bac). Word is that an agreement could be signed as early as next week.
No details yet on the specifics, but we’d be almost certainly be talking $1 billion-plus with a structure somewhat similar to what Blackstone negotiated with the New Jersey Division of Investment late last year. Or perhaps as large as the pair of $3 billion managed accounts that the Texas Teachers' Retirement System signed last year with Apollo Global Management (apo) and Kohlberg Kravis Roberts & Co. (kkr).
This could be the big PR splash CalPERS is looking for, given that such deals typically involve below-market, ILPA-compliant fee structures (at least for the PE-specific portions). Will be interesting to see if the deal is inclusive of the $500 million commitment CalPERS made to Blackstone Capital Partners VI, and if that would mean any retroactive fee alterations for either CalPERS or all BCP VI investors (depending on MFN clauses).
Both Blackstone and CalPERS declined to comment.
Sign up for Dan's daily email newsletter on deals and deal-makers: GetTermSheet.com