Calpers Investment Recommendation

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Calpers Investment Recommendation Powered By Docstoc
					Future Investment Landscape

                        Presented by
Joseph Dear, Chief Investment Officer
                           CalPERS
Today’s Agenda
• Current Investment Environment
• CalPERS Investment Program
• Future Investment and Marketplace Activities
Current Investment Landscape
• The financial crisis has had a serious impact on portfolios of pension
  funds, endowments, and foundations
• Economy appears to be stabilizing as the economic stimulus and
  financial institution recapitalization are having the intended effect
• Policy reform discussions are progressing
• As the dust settles, more clarity in the financial markets and more
  opportunities
CalPERS Investments
• Total CalPERS Market Value is currently over $200 billion
• Fund has gained $40 billion over low of $160 billion in March 2009
• As of November 30, 2009 the annualized 20 year rate of return was
  7.85%, beating our target of 7.75%
Key Drivers
•   Strategically employing asset allocation and rebalancing policies
•   Promoting capital markets regulatory reform
•   Taking advantage of unique value opportunities
•   Examining alignment of interests with investment partners
•   Building a comprehensive culture of risk assessment and
    management
Asset Allocation
As of September 30, 2009
                                                      1.0%
                                             2.3%
                           2.1% 6.9%
                                                                      26.1%




              28.4%

                                                                    22.0%
                                     11.4%



           Cash                        Domestic Equity (Public)   Domestic Fixed Income
           Alternative Investments     Non-US Equity              Non-US Fixed Income
           Real Estate                 Inflation-Linked
Strategic Considerations
•   Maintain discipline of a long term investor
•   Enhance risk management
•   Increase capacity to manage assets
•   Attract, develop, and retain skilled staff
Defining Our Future
•   Identify the new investment paradigms
•   Adapt our strategy to take advantage of the environment
•   Manage investment risk accordingly
•   Promote financial regulatory reform
Governance In Global Capital Markets
• Governance failures have exacerbated the severity and depth of the
  financial crisis
• Investors, Corporations, Regulators, Legislators, and Stakeholders
  must work together to restore integrity, trust, and confidence in the
  global markets
Financial Regulatory Reform
•   Transparency
•   Independence
•   Corporate Governance
•   Investment Opportunities
•   Systemic Risk
• U.S. Financial Regulatory Reform: The Investors’ Perspective
Investor Tools
• Proxy Voting: Shareowners can influence a company’s operations
  and corporate governance
• Corporate Engagement: Constructively engaging underperforming
  companies to address poor corporate governance practices
• Investor Collaboration: Advancing governance best practices at the
  market and individual company level through leadership in investor
  organizations
Executive Compensation
• Effective executive compensation programs are one of the most
  powerful tools available.
• CalPERS emphasizes the alignment of interests between executive
  management and shareowners.
• Well-designed compensation programs will be adequately disclosed.
• “Shareowner Advisory Vote”
Environmental Disclosure
• Environmental responsibility and climate risk is a financial issue
• Improve transparency and timely disclosure of environmental data
  related to risks and opportunities to improve investment decisions
• Modernize SEC’s disclosure system to include climate risk
  information
Corporate Board Diversity
• Corporate board diversity is an important attribute in the
  global market place
• With each director nomination recommendation, a
  corporate board should consider the issue of board
  diversity
• Diversity in the boardroom can lead to greater creativity,
  deliberation, and integrity
• CalPERS is working collaboratively to build a diverse pool
  of talented, qualified, and professional director candidates
Summary
• Positive outlook on financial markets
• Focus on strong policy and regulatory reforms
• Confident in our ability to achieve our target 7.75% return

				
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posted:12/2/2010
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