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Where is CalPERS Investing?

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    CalPERS CIO Joe Dear on the pension fund’s investment strategy.

  • Duration 5:25
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-- as a big story happening right now the nation's largest public pension fund.

Has made a big it.

Comeback.

Assets under management are almost back to 2007 levels right before that financial crisis hit and in terms outperformance.

It's having the best year since 2006 so where is the California public employees retirement -- -- -- -- calpers.

Putting their money to work right now lets -- chief investment officer Joseph dear.

Think joins me out of Fox Business was up from Sacramento California of course and I do want to ask you that I mean your portfolio at this point.

Is approaching 2007.

Highs what do you attribute that -- to in particular.

A leading up to the end of 2000 -- Surely come back a long way review by keeping to our long term strategic portfolio allocation so half of our money's an equity.

151415%.

In private equity -- -- -- since fixed income.

And then real estate exposure hedge funds.

And through the time from the global financial crisis we basically kept that allocation.

So as the markets came back so -- our portfolio.

I mean we're looking at right now pie chart of where you have your investments there -- -- looking at big chunk public equity obviously in com.

In green 10% real that is real estate is -- are you focused more on.

The California real estate market are you spreading it more it eater either across the country internationally -- that he's the part for you right now.

The real estate portfolio which was -- big source of trouble in the financial crisis.

This help improve our returns real stake gives a 15% return in the past year.

We're moving our portfolio strategy -- real estate from a growth orientation to an income orientation.

That includes exposures to US real estate core real estate think high quality central business district.

Office.

Properties industrial properties to capture growth.

And emerging market exposures not so much Europe and real estate that real estate than one of the drivers of our improved performance.

Obviously that 2012 certainly with real saving again you're gaining more than 13% -- -- Gaza problem put Florida a couple of big issues and stories.

They came into play with calpers in 2012.

A particular was you're one of the first funds to make headlines by saying we're gonna get out of the gun business we're no longer gonna have these positions.

In gun makers -- made the types of guns we saw -- Newtown Connecticut.

Are you feeling comfortable in that decision.

And if you're gonna get out of that business where's the next new business.

For.

Yeah surely you're a little ahead of us -- board at its February meeting will consider.

Our position in terms of exposure to.

Manufacturers of firearms.

Which are prohibited from ownership in the state of California.

It's a relatively small exposures seven point five million dollars in -- 250 billion dollar portfolio.

But our board will make the decision whether we wanted to deaths from those holdings.

I can't predict what will happen but selling out of seven have million -- position is gonna change the risk profiler.

Create a lot of transaction cost.

Unlike.

Group that actually manufactured the weapon used.

In the Newtown tragedy -- will take up divestment from firearms.

What we would do it as an alternative do we make that investment has just keep it -- through the regular weeks.

Well I'm glad you're making that distinction because calpers and cal serves a few well certainly the to a view it seemed to go in lockstep or whenever I -- wanna ask about something else -- in 2012 and that was JPMorgan you had big exposure.

To the company when that two billion dollar loss hit.

Calpers came out and said that he needs to go how do you filled now.

About Jamie Dimon leading JPMorgan.

I think Jamie Dimon is an example of how.

Managing a corporation is complex is JPMorgan it's impossible.

For the CEO to stay on top of all of the risks he still a very very talented executive.

And I don't think we actually call for his.

Termination I think we wanted the board.

Of the company to do a better job with respect to risk but that.

Questions for the JP morgans and the other financial giants is are these companies too big to manage -- they simply so complicated.

That they need to have pulled back and that will be a continuing discussion as we look at our market reforms in.

The imposition of a Volcker Rule in the US.

So is it fair to say -- that.

Your position is is change is a little -- you have more a kinder.

Position when it comes to date to Jaime diamonds leadership.

I -- act again Jamie Dimon is probably one of the most accomplished.

Executives and financial services in charge of any companies.

His story with the London whale in the six point six billion dollar loss in a trade is.

Even the best can make mistakes and the question will be what will the company learned going forward and you have to give him credit.

As he stepped up and accepted responsibility from that and that shouldn't be a refreshing novelty in government or business.

But right now it is.

Joseph ahead ask because obviously the decisions that calpers -- -- -- investments that you make well the market -- frankly.

-- -- calpers chief investment officer we're gonna be watching thank you for being here.

Thank you preventing.

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