Sapphire Partners is now managing all of CalSTRS' emerging manager portfolios

Sapphire Partners, the LP arm of enterprise software-focused VC Sapphire Ventures, announced this morning that moving forward, it will be managing five funds with $1.4 billion in assets that are focused on emerging managers on behalf of the giant California State Teachers’ Retirement System (CalSTRS). In fact, according to CalSTRS, which currently has a whopping $320 billion in assets under management, Sapphire is now exclusively in charge of the pension system's bets on emerging managers.

It's a big deal about which aspiring and newbie VCs should be aware, even as Sapphire has less fresh capital to invest than it might seem from the news.

So what happened here? Invesco, an investing giant with tentacles in a host of assets, had made a range of bets on emerging managers as part of its work with CalSTRS. Because the bets were interspersed with investments in healthcare and private equity funds, Invesco wanted to get out of this particular line of business, so it sold its emerging manager stakes to Sapphire -- which has long backed emerging managers -- at a discount. (A Sapphire spokeswoman describes the discount as "a de minimus amount for work previously done by Invesco.")

CalSTRS ran an independent process before selecting Sapphire, and it suggests it used Invesco's decision to rethink its own approach to funding emerging managers. As Rob Ross, a private equity portfolio manager at CalSTRS, told Fortune in a related interview, “Standardizing one group to focus on venture—because it’s so specialized from an emerging manager standpoint—made a lot of sense for us."

Much of the $1.4 billion in funds that Sapphire has taken control over has already been committed, but Sapphire says it anticipates investing $100 million per year over the next three or four years and that this capital does not need to be reinvested in the funds that Invesco had assembled.

Either way, Sapphire's new partnership with CalSTRS makes it one of the largest and most active supporters of the emerging manager system in the venture world, augmenting Sapphire's previous investments in earlier emerging funds, including Amplify, Data Collective and Union Square Climate, the first climate fund created by USV. Indeed, the development boosts Sapphire's assets under management to $3.6 billion.

Elizabeth ("Beezer") Clarkson leads Sapphire’s fund investing business, and told us last week that in the simplest terms, the move complements Sapphire's existing business, which is to look for promising fund managers in the U.S., Europe and Israel.

Added Clarkson: "There is a lot of going out and sourcing and finding talent, not just sitting and waiting for it to come to you."