Investments

Issues Update

We Have a Disciplined, Proactive Approach
September 23, 2009
While no one can predict what will happen in the markets, we’re aggressively developing strategies to increase future earnings.

Investment Manager Realignment
Staff is realigning relationships with hedge fund and private equity partners that can lead to reduced fees, better alignment of interests, and more mutually beneficial long-term relationships. We’re seeking fees based on long-term rather than short-term performance that has allowed managers to profit from us even while losing invested CalPERS money. We are also seeking better control of our capital by securing CalPERS-exclusive accounts rather than investing in commingled funds that limit access to our money.

Asset Allocation Update
The CalPERS Board made a mid-course revision of our three-year plan for allocating capital to five asset classes, reduced risk, and positioned the Fund to take advantage of market opportunities. Adjustments give investment officers more flexibility to buy low in the recessionary market and to sell high after recovery begins. View our asset allocation and our monthly progress.

Risk Management Development
We are engaging in a sweeping Board-directed initiative to advance new and innovative methods for risk management. The creation of a new ad hoc Board Risk Management Committee sets the stage for enhanced enterprise-wide risk management across support functions and the three major business lines: investments, retirement, and health benefits. Investment officers are also developing a new risk management system to account for market factors that weren’t anticipated by the quantitative models we relied on before the 2007-08 fiscal crisis.

Financial Market Reform is a Top Priority
We are working at the national level to restore investor confidence in the capital markets. We are working with other pension funds to push market reform principles that include greater disclosure and transparency, true regulatory independence, and ways shareowners like CalPERS can have a greater voice. Given the circumstances that led to the financial crisis, we feel the time is ripe to advance governance changes. Learn more about our corporate governance initiatives.



Back to Investments Issues Updates »