CalPERS posts largest ever losses

The pension fund's losses were mainly from its public equity investments but it was boosted by the performance of real estate, bonds and alternative investments, such as private equity.

The California Public Employee Retirement System (CalPERS) made its greatest annual loss in 2000 since it began keeping cumulative annual records in 1984.

The fund was down 1.38 per cent from last year but even after the loss, CALPERS’ assets were up 10.6 per cent compounded annually over a three-year period. After paying out benefits, its total assets rose to $165.2bn from $150.6bn three years ago.

The group alternative investments, such as private equity, performed best, posting a 25 per cent return over the year.

Reuters reports CalPERS chief investment officer Daniel Szente saying: “Our strong performance in real estate, bonds and alternative investments enabled us to limit our losses.

CalPERS lost 8.8 per cent on public equity which accounted for 59 per cent of investments but saw a 10.3 per cent gain on its fixed income investments which accounted for 29 per cent and a 17 per cent gain on its real estate holdings in 2000. Real estate accounted for 7 per cent of investments.

Early this month, CalPERS bought a 5 per cent stake in The Carlyle Group. The pension fund also invested $250m in Carlyle’s various funds and secured an option to invest a further $425m over the next two years.