CalPERS May Trim List Of Alternative Managers

Jul 20 2011 | 8:34am ET

CalPERS may reduce the number of alternative investment funds to which it allocates.

The $241.3 billion California Public Employees’ Retirement System says research shows 80% of its returns come from 55 of the 500 funds in which it invests under its alternative investment management program.

Real Desrochers, a senior investment officer for alt investment program, told Pensions & Investments the numbers show the pension needs a “more concentrated portfolio” in this space but said no decisions to terminate managers have been made. Desrochers said a full review of the program is underway and would be finished in September.

Although there may be too many cooks, the CalPERS AIM program did well during the year ending March 31, returning 25.34% to beat the benchmark of 20.58%. Overall, the entire fund earned 20.7% for the year ended June 30, thanks mostly to gains in stocks (which returned 30.2% for the year) and private equity (25.3%).

“Obviously the results are pleasing,” said Chief Investment Officer Joe Dear. “We are in the 20% club. It was a good year. We are back.”

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