The $205.6 billion California Public Employees' Retirement System is continuing to build out its infrastructure portfolio, which could soon reach $1 billion in total commitments, according to an email from a pension spokesperson.
The pension is still “ramping up the programme” and much of the discussion about new commitments has been in closed sessions of the board’s investment committee, according to the email.
But indications are that the public pension, the US’ largest by asset size, will wade more deeply into the asset class in 2010. The spokesperson said that the pension has investments in its pipeline that could bring its total commitments to the asset class to $1 billion or more by early 2010.
Additionally, the pension recently selected its first infrastructure consultant. The pension’s investment committee gave the job to Meketa Investment Group, a Massachusetts-based investment consultant which will help CalPERS evaluate infrastructure investment opportunities, allocation criteria and other elements of its infrastructure programme.
“The reason we were hired is to figure out those things with them,” said James Meketa, managing principal of Meketa Investment Group.
CalPERS already has $700 million committed to the asset class, which has a target allocation of 1.5 percent of CalPERS' total market value through 2010, with a range of .5 percent to 3 percent.
Of that $700 million, $400 million was transferred from CalPERS’ real estate and private equity asset classes. That included a $200 million commitment to the CIM Infrastructure Fund and two commitments of $100 million each to Carlyle Infrastructure Partners and Alinda Infrastructure Fund I.
A further $300 million was committed in 2009. The entirety of the commitment went to Alinda Infrastructure Fund II, which is targeting $3 billion in total commitments.
Infrastructure resides within a larger categorization that CalPERS calls the Inflation Linked Asset Class. That asset class, which CalPERS formalised as its fifth asset class in December 2007, has a target allocation of 5 percent of CalPERS market value through 2010.