View from CalPERS

Q: LPs have been changing their investment strategies in light of the economic slump. How has CalPERS reacted to recent market changes?

"In the past year or so, we've been active in engaging several separate accounts focused on credit strategies. We have made several commitments in recent years in debt markets. As of 30 September 2008, we had about $6.6bn in debt-related strategies in our private equity programme. We're taking advantage of the dislocation in credit markets - buying the debt of perfectly sound companies whose debt has traded down because of market conditions, not necessarily a reflection of company health. This has been a concerted effort by CalPERS to increase exposure to distressed debt as a result of increased market opportunity. The distressed share of our Alternative Investment Programme portfolio has gone up dramatically. It's a matter of assessing market conditions and taking advantage of opportunities."

Key facts

CalPERS Alternative Investment Management programme has generated a net IRR of 10.8% between its 1990 inception and 30 September 2008

In Q3 2008, only two new commitments were authorised from 100 proposals for new investment opportunities, for a total of $600m.

During the first three quarters of 2008, the AIM programme contributed $7.4bn to the underlying portfolio and received distributions of $2.6bn.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Send to  

• Topics
• LPs
• UK / Ireland