CalPERS earned a 13.5% return on its investments in 2004, with assets growing $21.5 billion to reach a record $182.9 billion as of Dec 31, the second straight year of double-digit returns for the Sacramento, Calif.-based fund.
The year's performance exceeded the 7.75% average annual return required to meet projected retirement obligations to the system's retirees. Currently, 68% of the California Public Employees' Retirement System portfolio is in equities, including alternatives and hedge funds, with 26% in bonds and other fixed income, and 6% in real estate.
Top performers included a return of 27.7% for corporate governance funds, 21.6% for international stock, 18.9% for real estate and 12.5% for international fixed income. Assets of the alternative investment management program, which specializes in private equity holdings, grew 17.8% and earned the system $2.8 billion in profits during the year, while hedge fund investments returned 8.9%.