GLOBAL - The California Public Employees' Retirement System (CalPERS) has earned a $695m (€535m) profit from its investment in the GI Partners Fund I, a decade-old vehicle that closed after offloading its last asset.

The investment generated a 31% net annualised internal rate of return.

CalPERS committed $500m to the fund in 2001 as part of a JV between its real estate and private equity programmes to invest in technology-related assets.

The scheme currently has $500m each in GI Partners Funds II and III, while GI Partners - a privately owned company that focuses on North America and Western Europe - manages more than $2bn of assets in CalPERS' CalEast portfolio.

Joseph Dear, CIO at CalPERS, said: "We have a long investing horizon, and the fund's success is testimony to our commitment to an investment strategy that seeks superior risk-adjusted returns across all asset classes."

In other news, CalPERS' board has decided to keep Pension Consulting Alliance (PCA) as its principal real estate consultant.

PCA has been the scheme's real estate consultant since 2009, but the contract had been up to review.

The CalPERS' investment committee selected PCA over two other finalists: Callan Associates and Courtland Partners.

The new contract is set to take effect from 1 April 2012.

Rob Feckner, president of the board, said all three companies had "much to offer", but that PCA possessed the requisite "knowledge and skill to provide investment advice as we move forward with a strong, comprehensive real estate strategy".

Founded in 1988, PCA offers customised consulting services in three areas - general, alternative and real estate investing - to pension funds.

Its 29 clients, among the largest institutional investors in the US, have a combined portfolio of roughly $900bn.

CalPERS has roughly 8% of its portfolio in real estate. As of 30 September, the market value of its real estate portfolio stood at $19.1bn, up 26% from the same time a year ago.

Topics