CalPERS and its consultant have a $3.5 billion difference of opinion over a proposed revision of the funds asset mix.
The California Public Employees Retirement System staff and consultant Wilshire Associates favor increasing exposure to real estate and alternative investments. However, the staff of the $175 billion fund favors boosting the allocations by two percentage points each, to 8% and 6%, respectively, while Wilshire recommends a one percentage point raise in each category.
Sacramento-based CalPERS real estate staff believes there is good relative value available, and fund officials and its advisers are analyzing potential deals of up to $1 billion each. Meanwhile, the alternative investment staff wants to boost allocations by at least two percentage points to fund new investments. But Wilshire questions whether the staff will be able to deploy this much money.
Both the staff and consultant favor reducing international equity by one percentage point, to 19% of total assets. The staff also would reduce domestic equities to 39% from 41%.
The issue will be addressed at the CalPERS investment committee meeting Monday.