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CalPERS private equity investments post 12.7 per cent return for 2003-04

CalPERS, the giant US public sector pension fund, generated a 12.7 per cent return and profits of around $1bn on its private equity investments in the fiscal year 2003-04, comfortably outstripping its 9.7 per cent benchmark.

The performance contributed to an overall return of 16.7 per cent on the fund's investments in the 12 months to the end of June 2004, the strongest set of returns since the mid-1990s, according to a statement.

"We beat our benchmarks in four out of five asset classes, and did so while managing our risk and navigating through the ups and downs of the market last year," said chief investment officer Mark Anson.

The System's top performing portfolio was its investments in corporate governance funds. They earned the System a 53.5 per cent return. CalPERS U.S. stock investments returned more than 20.8 per cent. The Fund's fixed income investments also performed well; international fixed income investments gained eight per cent, while U.S. fixed income investments earned 1.4 per cent.

CalPERS investments in real estate, which are largely office, retail, apartment and industrial assets, gained nearly 12 per cent. The System's investments in housing, timber and other specialized real estate assets earned 23.5 per cent.

As of June 30, 2004, 67 percent of the CalPERS portfolio is invested in equities, 26 percent in bonds and other fixed income and 7 percent in real estate.

CalPERS is the largest public pension fund in the US. The System provides retirement and health benefits to more than 1.4 million State and local public employees and their families.

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