CalPERS staff plans to broaden its environmental equity portfolio to potentially include global mandates, private equity, hedge funds or an internal program, officials at the fund told the investment committee at a meeting Monday.
Staff may also consider increasing the 0.5% allocation to the environmental equity portfolio.
Officials at the $227.7 billion California Public Employees Retirement System, Sacramento, want to be more proactive about investing in companies that can make a positive impact on the environment, said Mary Cottrill, senior portfolio manager.
Currently, three domestic managers and two international managers weed out the worst-polluting companies in their respective benchmarks. Staff plans to come back to the committee with ideas on how to expand the $493.9 million program within this year, Ms. Cottrill said.
The investment committee also approved renewing the portfolios of its environmental managers for one year. AXA Rosenberg, which runs $133.2 million; New Amsterdam Partners, $79.2 million; and SSgA, $78.1 million, are the domestic managers. SSgA also runs a $125.2 million international portfolio and Brandywine Global runs a $78.2 million international portfolio.
The investment committee also approved a new real estate policy that focuses on increasing exposure to overseas markets. The policy allows up to 100% of the portfolio to be invested in developed markets, up to 20% in emerging markets and up to 5% in frontier markets. The new policy is a result of a September 2007 review that called for increased exposure to overseas real estate. Ted Eliopoulos, senior investment officer for real estate, said shifting more assets overseas will be a gradual process.