The California Public Employees’ Retirement System, the largest pension in the U.S., said it earned 2.4 percent last fiscal year, below its target rate as financial-market turbulence depressed stock and bond returns. The $300 billion fund earned 1 percent on public-equity holdings and 1.3 percent in fixed-income investments, said Ted Eliopoulos, chief investment officer. Real estate returned 13.5 percent, while private equity gained 8.9 percent.
Calpers said it has earned 10.9 percent over a three-year period and 10.7 percent over five years. Its real-estate and private-equity returns lag by a quarter.
Eliopoulos said Calpers is reviewing its $2.2 billion it has invested in forestland and timber after losing 0.3 percent in the fiscal year, more than 1,000 basis points below its benchmark. He called the loss a “rather dramatic underperformance.” Pensions invest in forestland to generate long-term, stable income and to hedge against inflation.