CalPERS Reports 1% Investment Return for FY 2012

July 16, 2012 (PLANSPONSOR.com) - The California Public Employees’ Retirement System (CalPERS) reported a 1% return on investments for the 12 months that ended June 30.

The fund fell short of its benchmark, which returned 1.7%. CalPERS assets at the end of the fiscal year stood at more than $233 billion.  

The small gain – despite continued volatility in world markets and economies – was helped by improved performance of CalPERS real estate investments. Investments in income-generating properties like office, industrial and retail assets returned approximately 15.9%, outperforming the pension fund’s real estate benchmark by more than 3%.  

CalPERS performance was negatively impacted by significant allocations to U.S. and international public equities. The 1% return is below the fund’s discount rate of 7.5%, a long-term hurdle lowered recently in response to a steady decline in inflation and as part of CalPERS routine evaluation of economic assumptions. CalPERS 20-year investment return is 7.7%.  

Asset class performance was as follows: 

• Public equity:  -7.2%; 
• Private equity:  -5.4%; 
• Fixed Income:  12.7%; 
• Real estate:  15.9%; 
• Forestland:  -11.0%; 
• Infrastructure:  8.4%; 
• Liquidity:  4.6%; 
• Inflation assets:  0.1%; and 
• Absolute return assets:  -2.0%. 

Rebecca Moore
editors@plansponsor.com