Calpers boosts property investments as hedge funds shrink

Pension fund began restructuring real estate portfolio in 2010; has 11% target allocation for FY16.
SEP 16, 2014
By  Bloomberg
The California Public Employees' Retirement System, the biggest U.S. fund, is increasing investments in real estate by about $6 billion within a year as it begins to exit hedge funds. The $295 billion fund had 8.7% in real estate as of July 31. Since then, the allocation has risen to 9.9%, and the fund has set a target of 11% in fiscal 2016, according to documents posted on its website. (Related: Is Calpers' move away from hedge funds a bellwether for advisers?) The move is separate from Calpers' decision last month to pull all $4 billion it had invested in hedge funds, saying they were too complex and too expensive. The divestiture will take about a year and the board hadn't decided what to do with the money, Chief Investment Officer Ted Eliopoulos said at the time. Calpers began restructuring its real estate portfolio after suffering a 37% loss in 2010, when it wrote off speculative residential investments as property values slumped. As part of the overhaul, the fund has focused on core income investments such as rental apartments, industrial parks, offices and retail space. The shift will mean an increase in commercial real-estate investments by 27%, the Wall Street Journal reported. Mr. Eliopoulos was named chief investment officer last month after the death of Joe Dear. Mr. Eliopoulos had been the director of the fund's real estate division.

Latest News

LPL building out alts, banking services to chase wirehouse advisors, new CEO says
LPL building out alts, banking services to chase wirehouse advisors, new CEO says

New chief executive Rich Steinmeier replaced Dan Arnold on October 1.

Franklin Templeton CEO vows to "do what's right" amid record outflows
Franklin Templeton CEO vows to "do what's right" amid record outflows

The global firm is navigating a crisis of confidence as an SEC and DOJ probe into its Western Asset Management business sparked a historic $37B exodus.

For asset managers, easy experience is key to winning advisors' businesses
For asset managers, easy experience is key to winning advisors' businesses

Beyond returns, asset managers have to elevate their relationship with digital applications and a multichannel strategy, says JD Power.

Why retaining HNW clients ultimately comes down to one basic thing
Why retaining HNW clients ultimately comes down to one basic thing

New survey finds varied levels of loyalty to advisors by generation.

Stocks drop as investors digest Microsoft, Meta earnings
Stocks drop as investors digest Microsoft, Meta earnings

Busy day for results, key data give markets concerns.

SPONSORED Out with the old and in with the new: a 50% private markets portfolio

A great man died recently, but this did not make headlines. In fact, it barely even made the news. Maybe it’s because many have already mourned the departure of his greatest legacy: the 60/40 portfolio.

SPONSORED Destiny Wealth Partners: RIA Team of the Year shares keys to success

Discover the award-winning strategies behind Destiny Wealth Partners' client-centric approach.