February 21, 2007

CalPERS Commits $400 Million Each to Cleantech, Emerging Market Ventures

SACRAMENTO, CA - The California Public Employees’ Retirement System (CalPERS) will commit $400 million each to two new private equity vehicles – one focusing on clean energy and technology investments, and the other on global emerging markets.
 
The investments will be managed by specialized teams within Pacific Corporate Group, headquartered in La Jolla, California, subject to final contract negotiations.

“We have great confidence in the management teams at PCG to find promising cleantech and emerging market investments for CalPERS,” said Charles P. Valdes, Chair of the CalPERS Board’s Investment Committee. “We anticipate solid returns consistent with the double-digit gains that we have experienced in our Alternative Investment Management (AIM) Program in recent years.”

The clean energy and technology program will concentrate on energy, water and material technologies, products and services that reduce carbon emissions, conserve natural resources and improve energy efficiency. CalPERS will be the anchor investor in the PCG cleantech fund, which will seek to raise capital from other institutional investors.

The fund will pursue investments in cleantech partnerships as well as co-investments in cleantech companies alongside other general partners.

The new investments will augment the AIM Program’s current Environmental Technology Program, which has $200 million in cleantech commitments to seven partnerships.

CalPERS also will commit $400 million for new private equity partnership investments in emerging markets in Eastern Europe, Latin America and Asia. The existing private equity portfolio has benefited from being globally positioned, with strong performance and diversification coming from its European and Asian investments.

The new emerging markets fund provides CalPERS with additional reach into attractive investment markets around the globe. The vehicle will focus on investing in premier partnerships that employ a variety of investment styles and strategies including venture capital, buyout and acquisition financing, growth and expansion capital, and mezzanine financing.
 
“Our partner has a very good emerging markets team that will access a broader range of institutional quality funds than we have had in the past,” said Russell Read, CalPERS Chief Investment Officer. “This new vehicle will give us exposure to promising firms that may become significant players down the road. This initiative also will help us advance the strategic realignment of the AIM Program that we began last year.”

Consistent with the strategic realignment, the AIM Program is emphasizing larger relationships with a fewer number of partners while utilizing customized investment vehicles as an efficient means to deploy significant capital in attractive segments of the market, including emerging markets, cleantech, and other market niches targeted by the System.

Since 1990, CalPERS has invested in private companies primarily through limited partnerships or funds, typically with managers or general partners acting as third parties that invest the pension fund’s capital. The AIM Program had $33.1 billion in capital commitments and $12.1 billion in market value as of June 30, 2006.

CalPERS is the nation’s largest pension fund with assets totaling more than $230 billion. The System administers retirement and health benefits for approximately 1.5 million current and retired public employees and their families, and 2,600 California public employers. For more information on CalPERS, visit www.calpers.ca.gov.

 

Contact: Clark McKinley/Pat Macht
Office of Public Affairs
(916) 795-3991