CalPERS’ PE portfolio rises 23.8%

The $221bn pension published final audit numbers for fiscal 2009-2010 showing private equity gaining 23.8 percent, and real estate losing 10.7%.

The California Public Employees’ Retirement System’s private equity portfolio increased in value by 23.88 percent in fiscal 2009 – 2010, which ended 30 June, according to an updated performance report the pension published Tuesday.

CalPERS had published preliminary performance data in July, but the private equity and real estate portfolios were based on values as of 31 March, 2010. The new, final values are as of 30 June.

The valuation increases in CalPERS’ private equity portfolio were a huge reversal from the previous year, when private equity produced a negative 24.6 percent performance. But the updated numbers came down slightly from the estimated preliminary report in July, which pegged private equity at a 31 percent return.

Along with private equity, commodities, infrastructure, forestland and inflation-linked bonds portfolio increased in value by 8.7 percent over the fiscal year, CalPERS said.

The biggest reversal in the revised numbers came in the real estate portfolio, which improved from a devastating estimated negative 37.1 percent return for fiscal 2010 in July, to a negative 10.76 percent return as of 30 June.

“These figures confirm our initial assessment a few months ago that we were in recovery mode with the opportunity to capture future returns because of our long-term investment horizon,” Joseph Dear, CalPERS chief investment officer, said in a statement.

CalPERS has gained “more than $40 billion since March 2009”, Dear said. “We also beat our benchmark of 12.95 percent and eclipsed returns targets for every asset class except real estate. But even that asset class improved dramatically over what we reported in July.”

CalPERS also saved about $300 million in fee reductions with external managers, has eliminated low performing funds, which includes mostly hedge funds.