P&I 1,000: The Largest Retirement Plans
2008 P&I 1,000
Issue Date: January 21, 2008
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| California Public Employees' Retirement System | |
| Assets are in millions of dollars. | |
| Total assets | $254,627 |
| Defined benefit | $253,551 |
| Defined contribution | $1,076 |
| DEFINED BENEFIT PLAN: | |
| Employer DB contributions | $6,400 |
| Benefit payments | $10,070 |
| Asset mix: | |
| Domestic stock | 31.9% |
| International stock | 26.5% |
| Domestic fixed income | 23.2% |
| International fixed income | 2.8% |
| Cash equivalents | 0.8% |
| Private equity | 7.5% |
| Real estate equity | 7.1% |
| Other | 0.2% |
| Internally managed assets | $158,000 |
| DEFINED CONTRIBUTION PLAN: | |
| 457 | $707 |
| 401(a) | $369 |
| Internally managed assets | $295 |
| Total DC contributions | $130 |
| Asset mix: | |
| Other domestic stock | 79.3% |
| International stock | 5.1% |
| Fixed income | 3.4% |
| Stable value | 12.2% |
| SACRAMENTO, Calif. - As of Sept. 30, the California Public Employees' Retirement System's total employee benefit assets increased 16.7% from a year earlier. Defined benefit assets increased 16.5% during the same period; defined contribution assets increased 90%. | |
| Employer contributions to the defined benefit plan increased 5%; benefits paid increased 9.6%. | |
| During the past year, the fund underwent a review of its portfolio. In late December 2007, CalPERS trustees approved an asset allocation shift that increased its investments in alternative asset classes and carved out a new allocation to an inflation-linked asset class. The latter will comprise timber, commodities, inflation-linked bonds and infrastructure. The pension fund will also evenly split its equity investments between international and domestic securities in a move that staff says better reflects today's global markets. Another side effect of the review is a radical change to managers' pay; staff members propose only paying managers for the alpha they deliver and stripping out the beta. | |
| Separately, the fund is performing a strategic review of its real estate portfolio that could see it cutting relationships with managers in spite of the increased asset allocation. CalPERS has begun moving a larger chunk of its real estate portfolio overseas with an eye toward eventually having half of the portfolio in international investments. | |
| In the fixed income arena, CalPERS became the first fund to adopt a 130/30 strategy in its international bond portfolio in an attempt to squeeze returns from the lackluster portfolio. | |
| Officials at CalPERS took a new look at its 457 plan and are considering entering the ring of external money managers and offering CalPERS-run unitized portfolios. If it happens, the move still is years away, but CalPERS already has started offering its defined contribution participants in-house investment vehicles. The pension fund revamped its defined contribution plan by also rolling out new strategies including active domestic small-cap to midcap growth and value equity strategies. | |
| Finally, Gov. Arnold Schwarzenegger signed a law that prohibits the fund from investing in companies that do business in Iran. CalPERS would have to divest about $2 billion by year-end 2008. | |
| DEFINED BENEFIT MANAGERS: | |
| Domestic equities: Denali Advisors, LM Capital, Piedmont, Rigel Capital, Shenandoah Asset Management, Smith Asset Management, Stux Investments, Legato Capital Management, Strategic Investment Group, AXA Rosenberg, New Amsterdam, SSgA, Alliance Bernstein, Analytic, Atlantic Asset Management, BGI, Boston Co., Franklin Portfolio, Geewax Terker, Golden Capital, GSAM, INTECH, Jacobs Levy, Marvin & Palmer, Pzena, QMA, Smith Breeden, T. Rowe Price, Turner, WAMCO. | |
| International equities: Arrowstreet Capital, NorthRoad Capital Management, Pyford International, Brandywine, SSgA, Acadian, AllianceBernstein, Arrowstreet Capital, AXA Rosenberg, AQR, Baillie Gifford, BGI, Baring, Batterymarch, Brandywine, CapGuardian, DFA, Genesis, GMO, Lazard, New Star Institutional, Nomura, Pictet, QMA, Robeco. | |
| Domestic fixed income: Highland Capital, Nomura, PIMCO. | |
| Currency overlay: Pareto, SSgA. | |
| International fixed income: AllianceBernstein, Baring Asset Management, Brandywine, Mondrian, PIMCO, Rogge Global, WAMCO. | |
| Core real estate: BlackRock, General Investment and Development Advisors, RREEF, LaSalle, Hines, Commonwealth Pacific, First Washington Realty, Miller Capital Advisory, Morgan Stanley, AFL-CIO. | |
| Non-core real estate: Kennedy Associates, Avant Housing, Buchanan Street, Centerline Urban Capital Advisors, MacFarlane Partners, Bridge Housing, RREEF/CALSMART, City View, Institutional Housing Partners, CIM Group, Klein, Legacy Partners, Shattuck Hammond Partners, AEW Capital Management, CB Richard Ellis, Hearthstone Housing, Institutional Housing Partners, J.F. Shea, MacFarlane, Resmark, Newland Group, Wells Fargo, Weyerhaeuser, Hancock Timber, Campbell Group, Global Forrest Partners, Premier Pacific. | |
| Private equity: Advent International, Aisling, Alta, American River, Apax, Apollo, ArcLight, Ares, Audax, Aurora, Avenue, Bachow, Banc of America, Bastion Capital, Behrman, Belvedere, Birch Hill, Blackstone, Blum, Bridgepoint, Brown Brothers, Candover, Carlyle Group, Central Valley Fund, Clearstone Ventures, Clearwater Capital, Clessidra Capital, Coller, Craton Equity, CVC Capital Partners, DFJ Frontier, Dominion Ventures, Doughty Hanson, Doyle & Boissiere, Dresdner Kleinworth, Emergence Capital, Enterprise Investors, Equinox, Ethos, EM Alternatives, EuclidSR, Exxel Group. Fairview Capital, Fenway Partners, Ferrer Freeman, First Reserve, Flagship Ventures, Francisco Partners, Freeman Spogli, Garage Technology Ventures, Generation Partners, Gleacher, Granite Global, Grove Street, GTCR, HealthpointCapital, Hellman & Friedman, Hicks Muse Tate, Information Technology Ventures, ICV, INROADS, Insight Venture Partners, IVP, Ironbridge Capital, JPMorgan, Kline Hawkes, Kohlberg & Co., KKR, Landmark Partners, Leeds Weld, Leonard Green, Levine Leichtman, Lexington Partners, Lighthouse Capital, Lime Rock, Littlejohn, Lombard, M/C Venture, MHR, Madison Dearborn, Markstone Capital, McCown De Leeuw, Newbridge Capital. Nogales Investor, Oaktree Capital, Opportunity Capital, Pacific Community, Paladin Capital, Palladium Equity, Palomar Ventures, Parish Capital, PCG, Pennington, Permira, Perseus-Soros, Pharos Capital, Pinnacle, Prospect Venture, Provender, Providence Equity Partners, Questor Partners, Red Shift Ventures, RFG Management, Rhone Group, Rice Sangalis, Ripplewood Holdings, Rosewood Capital, Sanderling, Seaport Capital, Silver Lake, Skyline Ventures, Stonington Partners, Technology Partners, TPG, Thomas H. Lee, Thomas Weisel, Ticonderoga, TL Ventures, TowerBrook Capital, Trinity Ventures, TSG Capital Group, W Capital, Warburg Pincus, Welsh Carson Anderson Stowe, Weston Presidio, William E. Simon, WL Ross, Yucaipa. | |
| Hedge fund/fund of funds: PAAMCO. | |
| DEFINED CONTRIBUTION MANAGERS: | |
| Domestic equities: Turner, AllianceBernstein, SSgA, Smith Barney, American Beacon, T. Rowe Price, Solomon Bros., Evergreen Investments, Putnam Investments, Boston Co., Systematic Financial Management. | |
| International equities: SSgA. | |
| Fixed income: SSgA, WAMCO. | |
| Stable value: SSgA. | |
| Lifecycle/lifestyle/balanced: SSgA. | |
| The investment consultants are Wilshire and PCA for the defined benefit plan and Wilshire for the defined contribution plan. | |
| The key person overseeing the investment management of the defined benefit plan is Russell Read, CIO. Overseeing the defined contribution plan are Mr. Read, Anne Stausboll, chief operating investment officer, and Geraldine Jimenez, division chief. | |
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To purchase a hard copy or electronic reprints, please contact Laura Picariello at (732) 723-0569 or email lpicariello@crain.com.
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