NORTH AMERICA - The California Public Employees Retirement System's (CalPERS) real estate portfolio earned the highest return of any of the asset classes it invested in during the 2011-12 fiscal year.
The real estate portfolio produced a 15.9% return for the period, outperforming its benchmark by more than 3%.
The fund produced an overall return on all of its investments of 1% over the same period.
The success in real estate was split into three areas.
Joe Dear, chief investment officer, said: "The strategic portfolio produced a return of 22.26% net of fees for the same time period. This outperformed the ODEC index, which yielded a 13.5% return.
"Over the past 12 months, the strategic portfolio grew by 24% from $10bn (€8.2bn) to $13bn."
One of the pension fund's main strategies for this has been to focus on core assets.
Over the long term, it wants to have 75% of the real estate portfolio made up of this strategy.
The legacy portfolio in the real estate sector produced a return of 9.5%.
These were existing assets already owned by the pension fund and were more of a risky nature, including investing in land and development.
The real estate securities portfolio owned by the pension fund earned a 2% return.
The other asset class that produced a double-digit performance was fixed income, returning 12.7%.
The asset classes with the poorest performance were timberland at -11%, equities at -7.2% and private equity at -5.4%.
Dear said: "The last 12 months were a challenging period for all investors as the ongoing European debt crisis and slowing global economic growth increased market volatility and reduced equity returns.
"It's a clear reminder we must remain focused on performance, risk and internal controls in today's financial environment."
