CalPERS reached an all time record high of $182.9 billion in assets - $21.5 billion more than one year earlier, according to a report by Mark Anson, CalPERS Chief Investment Officer.
“This performance hit on all cylinders,” said Rob Feckner, Acting Board President and Chair of the CalPERS Investment Committee. “These gains, once again, will have a positive impact down the road on reducing employer contributions and lifting the taxpayers’ burden. It should provide assurance to our members that their financial future remains secure, and that we are well prepared to meet our benefit obligations.”
The fund’s performance in 2004 exceeded the 7.75 percent average annual return required to meet projected retirement obligations to the System’s retirees.
Nearly all of CalPERS asset classes earned double-digit returns. Highlights of performance by asset class were as follows:
- CalPERS investments in funds that use corporate governance strategies to turn around ailing companies gained nearly 28 percent.
- CalPERS international stock investments returned more than 21.6 percent to beat the Fund’s international investment benchmark of 21.5 percent, while the Fund’s U.S. stock investments earned 11.7 percent nearly matching its Wilshire 2500 index performance of 11.74 percent.
- CalPERS investments in real estate, which are largely office, retail, apartment and industrial assets, gained more than 18.9 percent. The System’s investments in housing, timber and other specialized real estate assets earned 24.6 percent. Both portfolios outperformed the NCREIF Property Index that returned 12.4 percent.
- The Fund’s fixed income investments also outperformed their benchmarks. International fixed income investments gained 12.5 percent, compared with its Salomon Brothers World Government Index benchmark of 12 percent, while U.S. fixed income investments earned 7.4 percent, beating its 6.7 percent benchmark.
- Assets of the Alternative Investment Management (AIM) Program, which specializes in private equity holdings, grew by 17.8 percent compared with a benchmark that gained 11.1 percent. The program earned the System $2.8 billion in cash profits during the year.
- CalPERS investments in hedge funds returned 8.9 percent compared to a 6.8 percent benchmark.
“This good performance is a testament to the guidance of the Board and the quality of the day to day management of assets by our professional staff,” said Anson.
Today, 68 percent of the CalPERS portfolio is invested in equities, 26 percent in bonds and other fixed income and 6 percent in real estate.
CalPERS is the nation’s largest public pension fund. The System provides retirement and health benefits to more than 1.4 million public employees and their families. For additional information about CalPERS, please visit www.calpers.ca.gov.
