Philip Angelides, California state treasurer, is pressing CalPERS to increase fixed-income investments in underserved areas in California, but the pension fund staff is resisting the proposal.
On Monday, the board of the $160 billion California Public Employees’ Retirement System, Sacramento, will discuss Mr. Angelides’ proposal to provide financing for affordable multifamily housing, commercial redevelopment projects, non-comforming home mortgages, commercial construction loans, small-business lending, and trust preferred securities issued by pools of community banks.
But CalPERS’ staff responded that the proposed investments were not attractive. "Many of these investments had lower liquidity from a small number of potential investors, smaller markets or production capacity in many of the categories, higher risk due to regional concentration, and lower return expectations derived from the lower yield to maturity quotes from the brokerage firms,” a staff memo said.
