SACRAMENTO, Calif. — CalPERS officials are contemplating a major shift into natural resources that would span all major asset classes — public and private equities, bonds and real estate.
While most institutional investors are tiptoeing into the "super-category" through an allocation to indexed commodities futures, officials at the $215.2 billion California Public Employees' Retirement System, Sacramento, think the opportunities lie in active approaches that make bets both on natural resources and the services that support those industries, including infrastructure investing.
Natural resources companies have underinvested in finding new reserves, improving technology and developing energy infrastructure for decades because of low energy prices. With crude oil prices now in the range of $60 to $70 per barrel, the demand for investment capital has increased dramatically.
"We're in the beginning stages of a very big transformation," Chief Investment Officer Russell Read told the CalPERS board at a half-day educational workshop on Sept. 12.