According to a news release, CalPERS’ plan calls for investments in both public and private infrastructure including, but not limited to, transportation, energy, natural resources, utilities, water, communications, and other social support services.
“We remain committed to California’s future and the investment opportunities that run deep between our coastline, mountains and valleys,” said Rob Feckner, President of the CalPERS Board of Administration. “We are prepared to increase our investments in infrastructure with our first and foremost goal being on investment returns, and a secondary goal of supporting essential community services that are crucial to continued economic development, a safe environment, and healthy schools and communities.”
Currently, CalPERS has $203 million invested in a combination of physical infrastructure investments and infrastructure-targeted private equity funds around the state. The Pension Fund has also lent its “AAA” rating to California cities and counties for credit enhancement of more than $326 million in infrastructure bonds.
Under its California allocation, CalPERS plans to target individual investments equal to or greater than $150 million. It will look for a number of key qualities in the investment that CalPERS calls “defensive,” including minimal competition, stable revenues and returns, low operating risk, and strong credit.
“Infrastructure is an integral part of the CalPERS investment portfolio,” said George Diehr, Chair of the CalPERS Investment Committee. “We’re looking for long-term economic value by providing safe, reliable, efficient and high-quality services that are vital to California that not only meet our risk-return objectives, but that we believe have the extra benefit of creating jobs and ultimately improving the economic climate.”
CalPERS investment staff is expected to bring an outreach and implementation plan back to the Pension Fund’s Investment Committee next month.
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