GLOBAL  - The California Public Employees' Retirement System (CalPERS), the largest pension fund in the US, has set aside as much as $800m (€504m) for investments in California infrastructure over the next three years.

The pension scheme said the newly created fund would create jobs and boost the local economy.

George Diehr, chair of the investment committee, said: "Infrastructure is an integral part of the CalPERS investment portfolio. We're looking for long-term economic value by providing safe, reliable, efficient and high-quality services that are vital to California that not only meet our risk/return objectives, but that have the extra benefit of creating jobs and ultimately improving the economic climate."

The 13-member board voted to create the new fund - to be invested in public and private infrastructure, including, but not limited to, transportation, energy, natural resources, utilities, water, communications and other social support services.

Under the new plan, CalPERS - which has $227bn in assets - plans to target individual investments equal to or greater than $150m.

Rob Feckner, president of the board of administration, said the "first and foremost goal" of investments was returns, but added that a secondary goal was "supporting essential community services that are crucial to continued economic development, a safe environment and healthy schools and communities".

CalPERS will adopt a "defensive" strategy for the new fund. The specific traits it will look for in its investment include "minimal competition, stable revenues and returns, low operating risk and strong credit".

Currently, the pension fund has $203m invested in a mix of infrastructure and infrastructure-targeted private equity funds in California.

CalPERS' investment staff is expected to present an "outreach and implementation plan" back to the pension fund's investment committee next month.

CalPERS administers retirement benefits for 1.6m active and retired state, public school and local public agency employees and their families and health benefits for more than 1.3m members.