The California Public Employees’ Retirement System, Sacramento, said annual ongoing costs for its investment operations have declined by about $90 million during the five-year period ended June 30, 2014, the pension fund said in a report released Monday.
“Understanding how costs impact the fund is an endeavor we have spent considerable time and resources on,” said Henry Jones, CalPERS board vice president and investment committee chairman, in a statement. “It’s encouraging to see positive results from our efforts.”
The cost to manage CalPERS’ $300.5 billion total portfolio in the fiscal year ended June 30 was found to be about $1.7 billion, the report said, with external management fees contributing 92% of that figure. That cost is down $90 million from the fiscal year ended June 30, 2010.
A continued focus on reducing external management fees and the number of external consultants, as well as additional insourcing of investment management functions, led to the reductions, the report says.
However, the report excludes profit-sharing fees to external managers, which rose 6% in the year ended June 30, 2014, to $420 million. Those profit-sharing figures were also incomplete because they did not include private equity figures.