LA Times (December 19)
In its first climate risk assessment, CalPERS, the largest U.S. pension fund, “found that one-fifth of the fund’s public market investments were in sectors that have high exposure to climate change. Those include energy, materials and buildings, transportation, and agriculture, food and forestry.” The report by CalPERS, however, didn’t go into much detail because “less than half of the 10,000-plus companies in their portfolio voluntarily disclose information about their carbon emissions.”
Tags: Agriculture, Assessment, CalPERs, Carbon emissions, Climate change, Energy, Exposure, Forestry, Investments, Materials, Pension fund, Portfolio, Risk, Transportation, U.S., Voluntary disclosure
Institutional Investor (September 21)
The California Public Employees Retirement System (CalPERS) “will sell its entire book of hedge funds, including 24 direct interests and another six hedge-fund–of-fund stakes.” This could signal a sea change as other pension funds reevaluate the effectiveness of hedge funds, which have mushroomed to $3 trillion. “Last year on average, hedge funds returned 9 percent, which was 23.4 percentage points less than public market returns.”
Tags: CalPERs, Effectiveness, Hedge funds, Market, Pension funds, Reevaluate, Return
Institutional Investor (August Issue)
With ￥108 trillion in assets under management, Japan’s Government Pension Investment Fund (GPIF) is almost six times the size of CalPERS. “Even more striking than the fund’s gargantuan size is its composition: Fully three quarters of the GPIF is invested in bonds, including ￥58.4 trillion of domestic bonds and ￥14.4 trillion of government agency debt.” This “mountain of government bonds” is “a low-return and potentially high-risk strategy,” and stands in contrast to other pension funds which are “trying to grow their way out by continuing to bet heavily on equities and making ever-larger allocations to private equity, hedge funds, real estate, infrastructure and other illiquid assets.”
Pensions & Investments (June 13)
“Say on pay” is helping governance grow up in the U.S. In the past investors upset over executive compensation might withhold votes for each member of the compensation committee. Now that they can directly vote against the compensation packages, corporate directors are being re-elected at the highest level of approval (95.3%) in half a decade. As Anne Simpson of CalPERS stated, “We’ve seen less megaphone diplomacy…. But we’ve seen a significant increase in real conversation, real dialogue” between shareholders and companies.
Tags: CalPERs, Compensation, Directors, Governance, Say on pay, Shareholders, U.S.
Institutional Investor (May 15)
Emphasizing the growing importance of environmental, social and governance factors (ESG) to investors, two major pension funds announced sustainable investment initiatives. The $236 billion California State Employees Retirement System (CalPERS) pension plan will “fully integrate ESG factors in all investment decisions, and across all asset classes.” Meanwhile, the $152.9 billion California State Teachers Retirement System (CalSTRS) has pledged that all of its “external managers will include an analysis of how environmental, social, and governance (ESG) issues factor into their strategies.” CalSTRS CEO Jack Ehnes said, “No matter what you’re doing with us, there are ESG risks that we think will have a long-term impact on the portfolio, and we want to be sure that you’re articulating for us how you’re looking at them.”
Tags: CalPERs, CalSTRS, ESG, Pension funds, Sustainable investment
