This set of investment beliefs is designed to provide a basis for strategic management of CalPERS’s investment portfolio, inform organizational priorities and ensure alignment between the CalPERS Investment Office and the CalPERS staff.
“Having an overarching set of investment beliefs to guide decisionmaking throughout the organization will be a tremendous asset as we work toward our strategic goals,” said CalPERS Investment Committee Chair Henry Jones. “The decisionmaking process was thoughtful and thorough, and leaves us with a firm sense of what is most important.”
Key investment beliefs include:
- Liabilities must influence the asset structure;
- A long-time investment horizon is a responsibility and an advantage; and
- Long-term value creation requires effective management of three forms of capital—financial, physical and human.
According to CalPERS, the adoption of these investment beliefs is a step in the process of integrating its assets and liabilities, and ensuring that the retirement system is sustainable over multiple generations.
“These beliefs are another important step in the recovery of CalPERS, providing a clear direction and philosophy for investment decisions,” said CalPERS Chief Investment Officer Joe Dear. “They also will be integrated into the culture of the Investment Office and help maintain continuity at all levels of staff.”
CalPERS’s investment committee has conducted a first reading of a policy that will provide context for how the investment beliefs should be used. The policy states that the investment beliefs are a framework for making decisions and not a checklist to be applied to each decision, and requires a periodic review of the beliefs. A final version of the policy is scheduled to be adopted at the October meeting of the committee.
The complete list of the investment beliefs can be found here.