CalPERS To Rely On Hedge Funds To Boost Returns

Sep 30 2011 | 10:47am ET

The nation's largest public pension fund is having trouble hitting its return target—and it's looking to alternative investments to help close the gap.

Joseph Dear, the chief investment officer of the California Public Employees' Retirement System, told The Wall Street Journal that "it may be hard to hit" its 7.75% return target in the "short term," due to the "low return environment with a lot of downside risk."

But unlike some of its public pension peers, CalPERS isn't going to lower that target. And it plans to rely more heavily on hedge funds and other alternative investments to boost returns hurt by stock market losses and low fixed-income returns.

Despite the short-term difficulties, Dear said that CalPERS is confident over the long run. "Over a 20-year time frame, a 7.75% investment return objective is obtainable."


In Depth

Q&A: Sancus Capital And The Disruption Of The CLO Market

Oct 5 2017 | 6:28pm ET

Traditional collateralized loan obligation (CLO) funds in the U.S. market can offer...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Finding Success as Alternatives Converge

Oct 9 2017 | 4:00pm ET

Rising interest among institutional investors over the past several years has led...

 

From the current issue of