Thu, Mar 23, 2017
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. Hedge fund liquidations in 2016 surpass 2009 levels, new launches decline[more]

    Benedicte Gravrand, Opalesque Geneva: Even as the hedge fund industry's total assets exceeded the $3tln milestone last year, hedge fund liquidations increased. So much so that 2016 had the highest number of liquidations since 2008, claims the latest HFR Market Microstructure Report, re

  2. Hedge funds find no joy in macro as returns lag Trump rally[more]

    From Gulfnews.com: In 2017, macro hedge funds were expected to shine. So far? Not so much. It's been a far from impressive first two months for funds that trade around macroeconomic events. Discretionary funds rose just 0.3 per cent through February, according to Hedge Fund Research Inc., while the

  3. Strategies - Billionaire investor Marc Lasry shares how he's playing markets right now, Classic models are failing FX hedge funds desperate for return[more]

    Billionaire investor Marc Lasry shares how he's playing markets right now From CNBC.com: Buy on the prospect of deregulation. Sell on the enactment of deregulation. That's the strategy that billionaire investor Marc Lasry is implementing, according to an interview with CNBC in Las Vegas

  4. Opalesque Exclusive: Aberdeen makes the case for the lower mid-market[more]

    Bailey McCann, Opalesque New York: Aberdeen Asset Management has released a new paper focused on lower mid-market private equity. According to the paper, this segment of the private equity market is gaining popularity with private equity investors that are looking for multiple expansion and less

  5. Hedge funds await outcome of French elections, feel pinch on lower oil prices & weak dollar[more]

    Komfie Manalo, Opalesque Asia: Hedge funds felt the pinch of lower oil prices and weak U.S. dollar as the Lyxor Hedge Fund Index was marginally down as of the week ending 14 March, Lyxor Asset Management said in its Weekly Briefing. The Lyxor He