CalPERS Resets Private Equity Allocation

Dec 19 2007 | 8:00am ET

The California Public Employees’ Retirement System this week adopted a new allocation strategy for its $250 billion portfolio, boosting its private equity allocation to 10%. It had previously been set at 6%.

Global publicly-traded stocks, which were 60% of the total portfolio, will move down to 56% and will be evenly split between U.S. stocks and international stocks. Its fixed-income and inflation-linked assets combined will be set at 24% percent, and its real estate asset allocation will be 10%.

The system’s board also set ranges for investing.  The pension set a range of +/-3% for its Alternative Investment Management program, +/-5% for total equity, +/-5% for fixed-income and the inflation-linked asset class combined, and +/-3 for real estate.  In addition, inflation-linked assets will comprise from 0% to 5% percent of the overall portfolio.

CalPERS investment officers will use the targets to deploy capital over the next two to three years, when the board tentatively is scheduled to again review and revise the allocation mix, based on dynamic market trends.

“These revised allocation markers reflect the promise of our private equity, real estate, and asset-linked investment classes,” said Charles Valdes, chairman of CalPERS investment committee. “By hitting the reset button every few years, we keep our portfolio balanced and diversified in a fluid market that never stands still.”


In Depth

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...

 

From the current issue of