California Public Employees’ Retirement System’s (CalPERS) real assets portfolio posted a negative return for the 2023 fiscal year.
For the 12-month period ending 30 June 2023, CalPERS’s $71.2bn (€65.4bn) real assets portfolio recorded a net rate of return -3.1%, outperforming the MSCI/PREA US ACOE Quarterly Property Fund Index, which generated -4% during the same period.
The real assets portfolio comprises $56.8bn of real estate, $14.4bn of infrastructure assets and $300m worth of forest land.
CalPERS CIO Nicole Musicco said: “Our return on real assets is reflective of the marketplace. For real estate, there [have] been values dropping, rising interest rates and a slowed level of transaction volume.”
Musicco said infrastructure had proven to be a more resilient asset class. “This has been the case for the sectors of renewables, data and airports,” she said.
Overall, CalPERS’s $463bn portfolio produced a net return of 5.8% on its investments for the period, the pension fund said this week. Public equity investments, which account for 45% of the total assets, outpaced all other asset classes, with an estimated 14.1% return in fiscal 2023.
“The resiliency of the stock market – particularly since the start of the calendar year – has created a solid base for the investment team to implement innovative approaches in delivering added value for our members in the coming years,” said Musicco.
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