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CalPERS approves boost in non-U.S. infrastructure

CalPERS' investment committee on Monday revised its real asset investment policy to diversify its infrastructure portfolio by increasing its maximum exposure to international developed markets by 10 percentage points, to 60%.

The $342 billion California Public Employees' Retirement System, Sacramento, also lowered the minimum permitted exposure to the U.S. infrastructure by 10 percentage points, to 40%.

"A significant portion of U.S. deals are in the power and energy space … we believe this is a measured and thoughtful approach to allow us to have a broader exposure across different sectors in the infrastructure landscape," Paul Mouchakkaa, managing investment director, real assets, told the investment committee.

Under the new policy, the permitted range for U.S. infrastructure is 40% to 100% from 50% to 100%. The range for international developed markets infrastructure is now zero to 60% from zero to 50%.

As of June 30, the infrastructure portion of its $39.5 billion real assets portfolio had a net asset value of $4.3 billion, with 55% in the U.S. and 45% in international markets. The current opportunity pipeline for infrastructure is primarily located in Western Europe, Australia, and Canada, according to a report to the investment committee.

Separately, in 2019 CalPERS plans to conduct a survey of its existing managers to better understand the workforce composition and human capital management of its close to 140 money managers, said Diego Carrillo, a CalPERS investment manager.

The survey will include questions pertaining to the diversity of the firm and the teams that are dedicated to CalPERS' accounts, Mr. Carrillo told the investment committee.

Mr. Carillo noted that the $209.2 billion New York State Common Retirement Fund, Albany, had conducted a similar survey; CalPERS officials plan to hire the same firm that conducted New York's survey. CalPERS officials declined to name the firm but earlier this year Lenox Park Solutions conducted a survey for the New York State Common Retirement Fund's minority-and women-owned business enterprise asset management and financial institutional strategy report, released in May.