Fri, Oct 20, 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. Regulatory - David Stockman: Trump tax reform overhaul is a pipe dream, stocks are heading for 40-70% plunge, Carried interest tax: How much does it matter?, Odey sees 'terrifying' mix in MiFID, tapering, asset values, Hedge funds come together to share cost of MiFID and research, SEC turns up the heat on U.S. investment advisers, India's Sebi asks hedge funds to report investments in commodity derivatives[more]

    David Stockman: Trump tax reform overhaul is a pipe dream, stocks are heading for 40-70% plunge From CNBC.com: David Stockman is warning about the Trump administration's tax overhaul plan, Federal Reserve policy, saying they could play into a severe stock market sell-off. Stockman, the R

  2. North America - Puerto Rico rejects loan offers, accusing hedge funds of trying to profit off hurricanes[more]

    From TheIintercept.com: Puerto Rico has rejected a bondholder group's offer to issue the territory additional debt as a response to the devastation of Hurricane Maria. Officials with Puerto Rico's Fiscal Agency and Financial Advisory Authority said the offer was "not viable" and would harm the islan

  3. Investing - WPP targeted by short-selling American hedge fund, Sun co-founder sells secretive hedge fund on big chip trade[more]

    WPP targeted by short-selling American hedge fund From Cityam.com: An American hedge fund has mounted a bet against WPP, the world's largest advertising group, with a trade worth almost £90m. Lone Pine Capital has built a short position worth 0.51 per cent of the FTSE 100 company,

  4. Hedge funds up as industry adjusts to rising rates[more]

    Komfie Manalo, Opalesque Asia: Hedge funds have reshuffled their portfolio after nearly four weeks of rising rates as the Lyxor Hedge Fund Index was up +0.2% from 19 September to 26 (+1.1% YTD), fuelled by strong results of global macro funds, Lyxor Ass

  5. Manager Profile - How the world's hedge fund king used 'idea meritocracy' to become a billionaire[more]

    From Forbes.com: In 1982, Ray Dalio made what he calls the biggest mistake of his life. He made a bet that there would be an economic collapse stemming from a debt crisis. And he was wrong. He lost money. He lost his client's money. He had to let people go from his firm and borrow money from his dad