CalPERS reports best returns in 20 years

Posted 9 years 192 days ago ago by    1 Comments  -3 Likes Like Dislike

The California Public Employees’ Retirement System (CalPERS) July 18 reported a 20.7 percent return on investments in preliminary estimates for the one-year period that ended June 30, 2011.

“This is our best annual performance in 14 years,” said Rob Feckner, CalPERS Board President. “For the second straight fiscal year, the Pension Fund exceeded its long-term annualized earnings target of 7.75 percent.”

The net-of-fees performance was the strongest since the 20.1 percent return of 1997 and the highest since the 2007-09 recession.

“This is a great one-year achievement that powerfully affirms our strategy and the skills of our investment team,” said Chief Investment Officer Joseph Dear. “While we can’t assume that we’ll sustain this high level of earnings, we have averaged a net return on investments of 8.4 percent for 20 years.”

“These strong returns are a testament to our commitment to our long-term investing principles,” said Anne Stausboll, CalPERS Chief Executive Officer. “Our members, employers and California taxpayers all benefit from our disciplined approach to investing.”

As of June 30, 2011, the market value of CalPERS assets stood at approximately $237.5 billion. A year earlier, the fiscal year ended with $200.5 billion. Investment returns are based on compounded daily earnings over the year, including continuing member contributions and benefit payments, and don’t precisely correspond to one-year changes in market value.

“The portfolio is quite healthy with positive benchmark-beating gains for nearly all of our asset classes over the past year,” Dear said. “Global equity (public stocks), private equity, fixed income, inflation-linked and cash equivalents all did well, and our real estate portfolio is back in positive territory after reversals during the financial crisis and recession.”

Today’s announcement includes asset performance gains as follows: global fixed income, 7.0 percent; private equity, 25.3 percent; public stocks, 30.2 percent; commodities, infrastructure, forestland and inflation-linked bonds, a combined 13.6 percent; and real estate, 10.2 percent.

Returns for real estate, private equity and some components of the inflation-linked class reflect market values through March 31, 2011 (not June 30, 2011). Final performance including the last quarter of the fiscal year will be available after asset valuations are completed.*

“Despite the good news, we’re well aware of continuing uncertainties in the global financial markets,” said George Diehr, Chair of CalPERS Investment Committee. “Accordingly, our strategy is accounting for such factors as high unemployment, the depressed housing market, and financial turmoil in Greece and other debt-plagued countries. We’re moving forward with our risk-focused asset allocation strategy and developing new tools to respond to market conditions.”

CalPERS is the nation’s largest public pension fund, administering retirement benefits for 1.6 million active and retired State, public school, and local public agency employees and their families and health benefits for 1.3 million members. The average CalPERS pension is $2,220 per month. For more information about CalPERS, visit www.calpers.ca.gov.

News Media Availability

Today the Pension Fund will hold a telephonic news media availability at 11:45 a.m., Pacific time, today with its chief investment officer and senior investment officers to discuss earnings for the 2010-11 fiscal year ending June 30, 2011. To participate, call the toll-free number, (800) 369-3158 from the U.S. or (773) 756-4801 from outside the U.S., using the “Investment Returns” pass code for call leader Brad Pacheco.

*Returns for real estate, private equity and some components of the inflation-linked asset class are for 12 months ending March 31, 2011 and are subject to change. Pending appraisals in the real estate portfolio will also affect final year-end data.


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  • James McRitchie, CSR Investment Committee 9 years 192 days ago
    Let's hope this throws some cold water on the critics. Small reforms are still needed but not the huge changes several had proposed. Don't forget, ballots in the current election must be postmarked or received by CalPERS on or before July 28, 2011 in order to count. Maybe we can finally get the public to focus on some of the real problems. Gimmicks in corporate accounting would be a start. The Ending Excessive Corporate Deductions for Stock Options Act, S. 1375 (Levin and Brown), would end excessive corporate tax deductions for stock options by requiring such deductions not to exceed the expense shown on corporate financial reports filed with the Securities and Exchange Commission. The Joint Committee on Taxation has estimated that ending this tax break would raise $24.6 billion in corporate tax revenues over ten years.


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