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 holds the fifth position in the recent IPE Real Assets Top 150 real estate investors 2023 ranking and the 30th position on the Top 100 infrastructure investors 2022 ranking.
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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