CalPERS Doubles Allocations To Hedge, Corp. Governance Funds

Jun 19 2007 | 10:54am ET

The California Public Employees’ Retirement System, the largest public pension fund in the world, yesterday approved new allocation ranges to potentially double its investments in corporate governance activism and hedge funds, each from $5 billion to more than $10 billion.

“This is in response to the solid performance of these funds in recent years and the need to capitalize on excellent market opportunities,” said Rob Feckner, CalPERS’ board president. “Corporate governance and hedge funds also help us to reduce risk since they are less affected by market swings than many other investment strategies.”

CalPERS currently manage $5.1 billion in the corporate governance program, which seeds start-up funds that invest in underperforming public companies and strengthen their corporate governance practices to improve overall performance. Until yesterday, the allocation range was 1% to 5% of the total global public equity portfolio of more than $150 billion.

The newly approved allocation is for 2% to 8%. Current investments are in the United States, Europe, the United Kingdom, and Japan, while future investments can include both developed and emerging markets. Since its inception in 1996, the program has generated annual returns averaging about 15%, compared with benchmark gains of nearly 7%.

CalPERS’ Risk Managed Absolute Return Strategies program currently manages some $5 billion in 21 single-strategy funds and seven funds of funds in Asia, Europe, and emerging markets. Since 2002, the program has returned 9.5%, according to the system.

Both programs will be funded from CalPERS' passive stock index funds.


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.