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
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

RIA dealmaking accelerates as three firms hit AUM milestones
RIA dealmaking accelerates as three firms hit AUM milestones

Wealth Consulting Group, Coastline and Maridea report fresh capital, acquisitions and asset growth as advisor M&A keeps climbing

VastAdvisor closes $1 million SAFE round from advisor-side backers
VastAdvisor closes $1 million SAFE round from advisor-side backers

Carson Group's Dani Fava, Jason Pereira of Woodgate Financial, and Sally George of Convergency Partners led the raise as the growth-tech startup builds out its AI platform and leadership bench.

Wells Fargo adds three advisor practices as recruiting rebound continues
Wells Fargo adds three advisor practices as recruiting rebound continues

New teams from William Blair, Ameriprise and UBS bring more than $560 million in combined client assets to the firm's employee and independent channels.

UBS will pay advisors 'handsomely' for banking starting next year
UBS will pay advisors 'handsomely' for banking starting next year

Regulators this year approved UBS Bank USA’s conversion to a nationally chartered bank.

SEC accuses Tricolor executives of hiding $800 million collateral hole
SEC accuses Tricolor executives of hiding $800 million collateral hole

How a subprime lender’s car-loan bonds allegedly unraveled before bankruptcy.

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income