Following Obama's Infrastructure Push, CalPERS Echos Commitment to Asset Class

(September 13, 2011) — Following President Barack Obama’s national infrastructure push detailed in his speech before Congress last week, the largest public pension fund in the United States has expressed its commitment to the asset class.  

The $225.4 billion California Public Employees’ Retirement System (CalPERS) Board of Administration has earmarked up to $800 million for investments in California infrastructure over the next three years. The scheme’s plan calls for investments in both public and private infrastructure, including transportation, energy, natural resources, utilities, water, communications, and other social support services. “We remain committed to California’s future and the investment opportunities that run deep between our coastline, mountains and valleys,” said Rob Feckner, President of the CalPERS Board of Administration, in a statement. “We are prepared to increase our investments in infrastructure with our first and foremost goal being on investment returns, and a secondary goal of supporting essential community services that are crucial to continued economic development, a safe environment, and healthy schools and communities.”  

George Diehr, Chair of the CalPERS Investment Committee, continued: “Infrastructure is an integral part of the CalPERS investment portfolio. We’re looking for long-term economic value by providing safe, reliable, efficient and high quality services that are vital to California that not only meet our risk-return objectives, but that we believe have the extra benefit of creating jobs and ultimately improving the economic climate.”

According to a statement from the pension fund, CalPERS aims to target individual investments equal to or greater than $150 million.

CalPERS’ investment in infrastructure jibes with a recent study by Keefe, Bruyette & Woods (KBW) that found that alternatives have remained a popular investment choice among US institutional investors. The survey of 37 chief investment officers or other institutional investment executives with asset allocation responsibilities discovered that alternatives are expected to gain more attention, with close to 40% saying they’re seeking to increase allocations to hedge funds and commodities. Additionally, more than 30% of respondents said they are looking to add to their real estate, infrastructure, and energy investments.  

To read an exclusive interview with two of the most influential chief investment officers in America – Chris Ailman of CalSTRS and Joe Dear of CalPERS — click here.