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September 17, 2011
CalPERS to Quadruple Investment in California Infrastructure
by Robert Kropp
Pension fund earmarks $800 million for investments of at least $150 million in infrastructure
projects that support essential community services.
The nation's largest public pension fund is planning a significant increase in its investment in
The California Public Employees' Retirement System (CalPERS),
with $227 billion in assets, annou
nced this week that it plans to increase infrastructure investment in California from its
current level of $203 million to $800 million over the next three years.
decision, which is part of a plan by CalPERS to increase its global investment in infrastructure to
$5 billion, followed by a few days President Obama's speech calling for jobs creation through
improvements in infrastructure, and occurs at a time when budget constraints are forcing many state
and local governments to seek out private partners for infrastructure development.
said that its investments in California would be of at least $150 million per project, and focus on
qualities such as "minimal competition, stable revenues and returns, low operating risk and strong
Rob Feckner, President of the CalPERS Board of Administration, stated that while
the pension fund's first priority will be financial returns, its secondary goal will be "supporting
essential community services that are crucial to continued economic development, a safe
environment, and healthy schools and communities."
The areas of infrastructure in which
CalPERS plans to increase its investment include transportation, energy, natural resources,
utilities, water, and communications.
George Diehr, Chair of the CalPERS Investment
Committee, stated that the investments sought by the fund will both meet its risk-return objectives
and "have the extra benefit of creating jobs and ultimately improving the economic climate."
In July, CalPERS anno
unced that its return on investment for the 2010-2011 fiscal year was 20.7%, its strongest
annual performance in 14 years.
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