The California Public Employees’ Retirement System’s real estate portfolio saw a dramatic increase in value at the end of the second quarter, despite still reporting a -10.76 percent return. Even [real estate]improved dramatically over what we reported in July. Joseph Dear, CalPERS
After predicting a -37.1 percent return for the asset class in July, CalPERS this week revised its forecasts revealing instead that, as of the end of June, real estate had returned a much lower than expected loss.
The pension had published preliminary performance data on its private equity and real estate portfolios based on values as of 31 March, 2010. The new, final values are as of 30 June.
chief investment officer
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.
“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.
Even [real estate]improved dramatically over what we reported in July.
Joseph Dear, CalPERS