My recent remarks on Bloomberg Television about the challenges for CalPERS to meet its 7.75 percent assumed rate of return have caught the attention of financial reporters, not to mention critics of public pensions including CalWatchdog.com. For those who have taken the time to watch the full interview, I state in so many words that while it may be difficult to meet our targets in the short-term, we believe it’s achievable in the long-term. The game has gotten harder, but it’s not impossible to succeed. Our investment track record is proof. We have met and beat our target over the last 20 years, earning an 8.4 percent average annual return. It is also important to point out that CalPERS has a global portfolio, not a US or developed markets one, which means we can capture the growth expected in emerging markets. We also will continue to pursue private equity and other investments that allow us to take advantage of our long horizon and liquidity. Those that read into my statements that this is CalPERS admission that our assumptions are too optimistic or unrealistic are simply wrong.
Chief Investment Officer
Read “CalPERS: 7.75% Gain Unrealistic?” at CalWatchdog.com.