CalPERS Closes Infrastructure Search
December 15, 2009
CalPERS has hired its first lead consultant for its “young infrastructure program,” the Sacramento plan announced yesterday.
Westwood, Mass.-based Meketa Investment Group was selected for the account, trumping finalists firms Pension Consulting Alliance, R.V. Kuhns & Associates and Wilshire Consulting, a Dec. 14 press release said. Meketa’s contract with the California Public Employees’ Retirement System is scheduled to begin at the start of next year.
To date, CalPERS has already placed $700 million in infrastructure as part of its inflation-linked asset class, which was launched in 2008, the release noted.
“Additional investments are under review as the infrastructure program approaches its allocation of 1.5% of total CalPERS market value by the end of 2010,” the release said. “The discretionary range around that target represents a total potential commitment of up to $7 billion over a five-year horizon. The performance goal is 5% above the Consumer Price Index (CPI), a benchmark for the rate of inflation.”
Slow and steady
Separately, a quarterly report delivered at a Board meeting yesterday said the investment portfolio for the system is “showing signs of steady growth,” and now stands at $200 billion. This represents a $40 billion gain over CalPERS low of $160 billion in March 2009, a press release on the matter said.
The portfolio’s exposure to the equity markets and corporate governance funds aided in the positive returns.
For the quarter ending Sept. 30, domestic stocks returned 16.7%, international stocks 20.7%, governance funds 16.6% and fixed-income 9%.
On a more dismal note, real estate saw declines of over 30% for the quarter.
“We are seeing some strong signs of economic growth that are having a positive impact on the value of our portfolio,” said Joseph Dear, CIO for CalPERS in the statement. “While we are still cautiously optimistic, we are seeing some light at the end of the tunnel.”
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