CalPERS Discusses Adoption Of “Investment Beliefs”


The last agenda item for Monday’s meeting of the Investment Committee of the Public Employees’ Retirement System was an ongoing ”Discussion of Investment Beliefs”. No, this wasn’t a theological discussion. For the last two years, the CalPERS investment office has been involved in discussions about developing a set of “investment beliefs”. Last fall, CalPERS even retained a consultant to assist in the project.

Part of this project has involved interviewing CalPERS’ Board Members, investment staff and others. Some of the results of this process are interesting. For example,

  • There is a “low conviction” that hedge funds should be an important part of CalPERS strategy; and
  • There is a “very strong conviction” that real estate, especially core real estate, should be an important part of CalPERS’ investment strategy.

Not surprisingly, the CalPERS staff believes that corporate governance adds value and that CalPERS should engage companies on governance issues. There is considerable, but less support for investment decisions based on environmental or social factors, in particular a company’s human capital practices including fair labor practices, health and safety, responsible contracting and diversity.

Whatever the outcome of this effort, it is useful to remember that CalPERS’ raison d’être and its sole and exclusive purposes are already spelled out in the California Constitution:

“The members of the retirement board of a public pension or retirement system shall discharge their duties with respect to the system solely in the interest of, and for the exclusive purposes of providing benefits to, participants and their beneficiaries, minimizing employer contributions thereto, and defraying reasonable expenses of administering the system.”

Article XVI, Section 17(b).


Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Allen Matkins Leck Gamble Mallory & Natsis LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.