CalPERS has long been known as a hands-on, activist-oriented pension fund, but its recently minted list of 10 investment beliefs seems to have stirred up some hostility among financial professionals.
Its spokesman calls much of the reaction “uninformed chatter.” After a protracted process, the largest public pension fund in the U.S. said it formally adopted its new beliefs to “provide a basis for strategic management of the investment portfolio, inform organizational priorities and ensure alignment between the Investment Office and CalPERS staff.”
1. Liabilities must influence the asset structure.
2. A long-time investment horizon is a responsibility and an advantage.
In addition, said DeAnda, “There (are) no specific deliverables that come out of the adoption of the beliefs; nothing changes about the portfolio, or our operations.”
These principles, which were given preliminary approval in September and should be formally adopted at the October meeting of CalPERS’ investment committee, also were not designed to convert the fund’s entire $265 billion-plus assets to passive management, as some in the industry have suggested.