CalPERS Generates 2.4% Return for FY 2015

California Public Employees’ Retirement System (CalPERS) returned 2.4% in fiscal year 2015 – ended June 30th, 2015. This was CalPERS’ worst performance since 2012 when it generated a 1% return. Listed equities were a major drag on performance, along with private equity. The pension giant had an internal goal of 2.5%, far below its targeted long-term pension return of 7.5%. At June 30th, CalPERS had a bit more than US$ 301 billion in assets. Other pensions globally have fared better. Japan’s GPIF, the largest pension in the world, earned 12% in the year ended March 31.

“Despite the impact of slow global economic growth and increased short-term market volatility on our fiscal year return, the strength of our long-term numbers gives us confidence that our strategic plan is working,” said Ted Eliopoulos, CalPERS Chief Investment Officer in a press release.

CalPERS is in the midst of a significant re-organization regarding its investment office. The pension system dropped hedge funds and is looking toward reducing alternative asset manager relationships – essentially halving them by 2020. CalPERS is also putting up its timberland assets for sale. Those assets generated a -0.3% return in FY 2015.

Asset Class Returns

Asset Class FY 2015 Return Performance Against Benchmark
Public Equity 1.0% (31) bps
Private Equity 8.9% (221) bps
Fixed Income 1.3% 93 bps
Real Assets 12.4% 90 bps
1. Real Estate 13.5% 114 bps
2. Infrastructure 13.2% 932 bps
3. Forestland -0.3% (1,094) bps
Liquidity 0.90% (77) bps
Inflation Assets -11.5% 147 bps
Total Fund 2.4% (9) bps

Source: CalPERS

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