CalPERS announces $500 million investment partnership

08/04/2014 9:13 AM

08/04/2014 10:13 PM

CalPERS continues to pour more of its money into roads, bridges, airports and other forms of infrastructure.

The California Public Employees’ Retirement System said Monday it has formed a $500 million partnership with UBS Global Asset Management. The partnership will invest in various global infrastructure deals.

CalPERS is putting in $485 million and UBS the rest. The partnership is known as Golden State Matterhorn LLC. Ted Eliopoulos, CalPERS’ interim chief investment officer, said UBS has “a proven track record in global infrastructure investing.”

The deal is part of CalPERS’ commitment, launched several years ago, to build a $5 billion infrastructure fund. Toward that goal, the $300 billion pension fund has purchased a 12.7 percent share of London’s Gatwick Airport and an undisclosed share of a 65-mile underwater high-voltage line that transmits electricity between New Jersey and Long Island, N.Y. In addition, three years ago, CalPERS said it was building an $800 million California-only infrastructure fund.

All told, CalPERS has $1.8 billion in infrastructure investments. They earned a 22.8 percent return in the fiscal year that ended June 30.

Pension funds have been increasingly turning to these investments in the years following the 2008 market crash, viewing infrastructure as a relatively stable, income-generating vehicle. For instance, the California State Teachers’ Retirement System created a $500 million global infrastructure fund in partnership with a firm from Australia.

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