CalPERS Rethink its investment strategy amid mounting criticism

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CalPERS Rethink its investment strategy amid mounting criticism

Public criticism has been wage against CalPERS for its exposure to high fee volatile investments like private equity. The $324 billion California Public Employees Retirement System (CalPERS) follows a growing trend among pension systems. Many of them are seeking to obtain better returns than that which is traditionally offered from safer investment alternatives. Nevertheless, these returns are not guaranteed, and the pension is on the hook for any unexpected losses. In particular, CaLPERs private equity strategy has come under fire for the alleged high fees it costs.

CalPERS CIO, Ted Eliopoulos, stated that starting in July the pension fund will review its position in private equities. He went on to explain that there would be a review of their investment strategy regarding private equities and, if needed, reductions in these investment vehicles would take place. Currently, the pension has 8%, or almost $26 billion, of its fund in private equity, a decline from last year’s 10%.

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