CalPERS returned a preliminary 12.5% in the fiscal year ended June 30, driven by strong gains in the public equity asset class.
The $259.8 billion California Public Employees' Retirement System, Sacramento, announced public equity returns of 19% in the year ended June 30, outperforming the pension fund's custom public equity benchmark by almost one percentage point, according to a news release.
Joseph Dear, chief investment officer, called the annual performance “solid” and attributed it to CalPERS' asset allocation, particularly to a 2.3-percentage-point overweighting to global equities. “We were able to ride the markets,” but the overweighting helped, he said.
Global equities have a 50% target allocation within the equity portfolio. CalPERS raised that to 52.3%, plus added another two-percentage-point overlay position.
The strong fiscal year contrasts with the year ended June 30, 2012, when CalPERS had only a 1% investment return.
Annualized three-year returns as of June 30 were 11.1%.