CalPERS could add a $500 million internally managed pilot commodities program next year pending approval of a commodities investment policy expected to be announced at the $221.3 billion system's Dec. 15 board meeting.
The main objective of the program would be to add diversification to the California Public Employees' Retirement System's total portfolio while meeting or exceeding the return of an as yet unspecified index. "Commodities can play an important role in helping us lock in potential gains and reduce risks across the CalPERS portfolio," Rob Feckner, board president, said in a news release.
If approved, the Sacramento-based fund will hire additional staff to administer it, make investment decisions, monitor risk and report on activities and performance. A minimum of one portfolio manager and one investment officer will be hired, according to an e-mail from Clark McKinley, spokesman. Funding will come from a cash account in the fixed-income portfolio.
CalPERS officials will also decide as early as next summer whether to create a separate natural resources/commodities asset class, according to the news release. The fund now has 8.4% of total assets in natural resources, now part of its stock, bond and real estate portfolios.