CalPERS ramps up Asia allocation

The US pension fund is already an investor in Affinity Equity Partners, Apollo, Carlyle, PAG, and SAIF Partners funds targeted at the region.

The California Public Employees' Retirement System (CalPERS) is looking to commit 10 percent of its portfolio to Asia, Dana Hollinger, Insurance Industry Representative at CalPERS said at PEI’s Direct Investor Summit.

“For us Asia is an opportunity but there are also challenges – environmental, social and governance (ESG), accounting and sustainability issues – but we still see it as growth opportunity and we are looking to put more capital into this region,” Hollinger said.

In Asia, CalPERS has committed capital to funds managed by SAIF Partners, Asia Alternatives, Carlyle Group, PAG, Apollo Global Management and Affinity Equity Partners.

When asked about investing directly in Asia, Hollinger said: “I don’t see us committing capital to a boots-on-the ground presence in Asia within the next five to seven years. We are constrained by salaries to go direct.”

CalPERS is however looking to consolidate its infrastructure, real estate and forestland programmes as part of its broader real assets strategy, as reported by PERE.

In March 2015, the pension fund entered into a partnership with Australia’s Queensland Investment Corporation to run an $805 million customised Asia-Pacific infrastructure portfolio.

CalPERS is the largest pension fund in the US, with approximately $293 billion in assets under management as of 13 April 2016. Its private equity investments fall within its Alternative Investment Management (AIM) program, which has generated more than $34.1 billion in profits since its inception in 1990.

CalPERS allocates 54 percent of its portfolio to equities, 20 percent to fixed income, 9 percent each to private equity and real estate, 6 percent to inflation-sensitive assets and 2 percent to infrastructure.