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

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

DarcMatter: The Top Trends in Alternative Investments for 2017

Jan 13 2017 | 8:22pm ET

The $7 trillion alternative investments industry is poised for continued growth...

 

From the current issue of

The U.S. Commodity Futures Trading Commission (CFTC) ordered The Goldman Sachs Group Inc., and Goldman, Sachs & Co. to pay a $120 million penalty for attempted manipulation and false reporting of ISDAFIX Benchmark Rates, a global benchmark for interest rate products.