CalPERS made $2.8bn from PE last year

The pension's private equity programme made a significant contribution to an overall return of 13.5 percent on investment in 2004, helping to lift assets to an unprecedented $183bn.

The California Public Employees’ Retirement System (CalPERS) earned a 13.5 percent return on its investments across all asset classes last year.

The pension reached an all-time high of $182.9 billion (€140.5 billion) in assets, an increase of $21.5 billion on the previous year, according to chief investment officer Mark Anson.

CalPERS’ alternative investment management programme, which specialises in private equity holdings, earned the fund $2.8 billion in 2004, an increase of 17.8 percent against a benchmark of 11.1 percent.

The fund’s real estate portfolio showed an increase of 18.9 percent and investments in timber, housing and specialised real estate assets earned 24.6 percent, both outpacing the National Council of Real Estate Investment Fiduciaries (NCREIF) Property Index at 12.4 percent.

CalPERS’ investments in hedge funds provided a return of 8.9 percent compared to a 6.8 percent benchmark.

68 percent ($124.4 billion) of CalPERS' capital is allocated to equities, which includes $8.7 billion (4.75 percent) towards alternative investments and private equity. 26 percent of the portfolio is allocated to fixed income and 6 percent ($11.7 billion) dedicated to real estate.

Commenting on the figures, acting board president and chair of CalPERS’ investment committee Rob Feckner said in a statement: “This performance hit on all cylinders. It should provide assurance to our members that their financial future remains secure and that we are well prepared to meet our benefit obligations.”

Elsewhere, Canadian pension fund Caisse de dépôt et placement du Québec has posted a 12.2 percent return on investment for 2004, based on strong private equity and real estate returns, according to a report from Canadian newspaper The Globe and Mail.

The Caisse’s private equity division posted a 20.5 percent return, while the real estate sector returned 22.7 percent. Equities returned 12.6 percent, hedge funds 7.8 percent and fixed income 7.1 percent.

Caisse’s net assets under management increased by C$10.8 billion to C$102.4 billion ($83 billion; €64 billion).