CalPERS is reviewing its alternative investment management program and plans to reduce the number of funds in which it invests, fund executives said Monday.
Real Desrochers, senior investment officer for the $241.3 billion California Public Employees' Retirement System's alternative investment management program, said the ongoing analysis shows that 80% of the program's return come from 55 funds. He said the Sacramento-based fund has investments in around 500 funds in its alternative investment program, and some managers have multiple funds. The exact number of managers was not immediately available, officials said.
The numbers are showing that CalPERS needs to have a more “concentrated portfolio” in its alternative investment program, Mr. Desrochers said. He said no decisions have been made to terminate any managers. He said the full review won't be completed until sometime in September.
For the year ended March 31, the total return for the CalPERS AIM program was 25.34%, beating the benchmark of 20.58%.
Separately, fund officials announced Monday that the entire fund earned 20.7% on its investments for the year ended June 30, led by gains in stocks and private equity.
Equities returned 30.2% for the year — its best result in 14 years, while fixed-income investments rose 7%. Real estate and private equity, which are both delayed by three months, earned 10.2% and 25.3% through March, respectively.
“Obviously the results are pleasing,” Chief Investment Officer Joe Dear told the governing board Monday during a meeting in Petaluma. “We are in the 20% club. It was a good year. We are back.”
With the gain, the pension fund earned a compound annualized 3.41% for the past five years, 5.36% for the 10 years and 7.11% over 15 years. It gained 8.38% annually over 20 years.
Bloomberg contributed to this story.