CalPERS Saw Double-Digit Gains in 2010

Reprinted from CalPERSresponds.com | January 26, 2011

CalPERS earned a 12.5 percent net return on investments for the 2010 calendar year. The solid net returns mark the second straight calendar year of double-digit gains for the nation’s largest public pension fund. Total fund assets closed 2010 at $225.7 billion. CalPERS assets have gained more than $65 billion since the fund’s low point in March 2009, at $160 billion.

The gains reflect a repositioning of CalPERS portfolio to take full advantage of the overall gains in the market last year. CalPERS private equity program – the Alternative Investment Management (AIM) Program – was the biggest gainer among asset classes in 2010, with a 21.5 percent overall return. CalPERS Global Equity investments returned 14.6 percent last year, with domestic stocks gaining 17.3 percent and international stocks returning 12.8 percent. Both portfolios beat their benchmarks.

Other CalPERS asset classes also saw strong returns last year:

  • Global Fixed Income, up 11.6 percent, beating its benchmark by nearly 3 percentage points.
  • Inflation Linked Asset Class, which includes infrastructure, commodities, inflation-linked bonds and forestland, up 7.8 percent. That topped its benchmark by more than 2 percentage points.
  • Though the real estate portfolio saw an overall decline of 5 percent in 2010, the drop was the smallest since the beginning of the financial crisis. The reported returns also lag the year-end results by one quarter.

CalPERS thinks long term and has earned a 7.9 percent return over the last 20 years, beating it’s assumption of 7.75 percent needed to pay benefits.