Fri, Sep 30, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

CalPERS flexes fee reduction muscles, saves $300m with external manager fee reductions

Tuesday, November 09, 2010
Opalesque Industry Update - The California Public Employees’ Retirement System (CalPERS) today reported a final net return on its investments of 13.3 percent for the one-year period that ended June 30, 2010, beating the pension fund’s preliminary return estimate by almost two percentage points.

Audited performance through the end of the 2009-10 fiscal year for all asset classes brought the Fund’s total market value to $200.5 billion, or $500 million higher than reported last July. At that time, returns for real estate, private equity, infrastructure and forestland were available only for the 12 months ending March 31, 2010.

“This updated report indicates a gain of more than $40 billion since our turn-around from the lowest point of the recession in March 2009,” said Chief Investment Officer Joe Dear. “We also beat our benchmark of 12.95 percent and eclipsed return targets for every asset class except real estate. But even that asset class improved dramatically over what we reported in July.”

The upturn for the 2009-10 fiscal year exceeded the long-term annualized earnings target of 7.75 percent and brought the 20-year return average through June 30, 2010 to 7.65 percent.

The CalPERS Board, investment staff and outside consultants are developing a new plan beginning in 2011 for how to allocate capital in public stocks, private companies, bonds and other fixed income, real estate and inflation-linked assets like commodities, infrastructure and forestland.

CalPERS has also saved almost $300 million in fee reductions with external managers, has eliminated low-performing funds from its portfolios and is developing new risk management tools. It also successfully advocated several federal financial market regulatory reforms aimed at protecting investors, consumers and the economy from future financial crises.

Today’s announcement includes market value of asset changes for the year that ended June 30, 2010 as follows: global fixed income, up 20.35 percent; private equity, up 23.88 percent; public stocks, up 14.42 percent; commodities, infrastructure, forestland and inflation-linked bonds, up a combined 8.70 percent; and real estate, down by 10.76 percent compared with an estimated decline of 37.1 percent reported in July.

“These figures confirm our initial assessment a few months ago that we were in a recovery mode with the opportunity to capture future returns because of our long-term investment horizon,” Dear said. “These financial figures are good news for employers since investment gains will help mitigate increases in their contribution rates.”

(press release)

Source

kb

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Studies - Hedge funds’ study reveals vast disparity in types of investors securing side letter arrangements, Cambridge: Look to private investments for best access to LatAm growth[more]

    Hedge funds’ study reveals vast disparity in types of investors securing side letter arrangements A new study of the hedge fund space by industry law firm Seward & Kissel LLP reveals a wealth of information regarding established hedge fund managers’ use of side letters—special agreements

  2. Activist News - Caesars 'optimistic' on deal with hedge fund creditors[more]

    From Reuters.com: Caesars Entertainment Corp said on Monday it remains "optimistic" of reaching a $5 billion deal with the bulk of its creditors to push its main operating unit out of bankruptcy, but one hedge fund bondholder said it will pursue litigation. Caesars offered a sweetened $5 billion set

  3. Hedge funds recover from losses as central banks give markets a respite[more]

    Komfie Manalo, Opalesque Asia: The Lyxor Hedge Fund index was up 0.4% from the week ending September 20 (-2.4% YTD), supported by the willingness of central banks to remain accommodative, Lyxor Asset Management said in its weekly briefing. It ad

  4. Perry Capital closing flagship fund after almost three decades[more]

    From Blooomberg.com: Richard Perry, one of the biggest names in hedge funds, is calling it quits after 28 years. Perry, 61, is winding down his New York-based flagship fund as the industry confronts one of the most tumultuous periods in its history. In a letter to investors Monday, he said his style

  5. Eden Rock buys Gottex stake in ERG Asset Management[more]

    Matthias Knab, Opalesque: Eden Rock Group announced the purchase of Gottex’s stake in ERG Asset Management and so the firm is now wholly owned by Eden Rock. The two firms established the joint venture in 2011 to focus on providing cost effective solutions to funds holding illiquid investments, as