yank pension funds dont think resources cycle has
Hmmm, wonder who their brokers are so can send them a note on Oz's next major U-producer
IMBOOC
Biggest pension fund will invest in developing nations and expand in commodities Dorothy Kosich '21-DEC-06 08:00'
RENO, NV (Mineweb.com) --The largest public pension fund in the United States, the California Public Employees Retirement System (CalPERS), has decided to permit stock purchases in selected companies in China, Russia, Brazil, Venezuela and other developing nations.
The pension fund amended its policy to permit current emerging markets manager AllianceBernstein, Dimensional Fund Advisors and Genesis to buy stock in such companies on a case-by-base basis effective January 1, 2007.
The $4.8 billion CalPERS emerging markets portfolio currently prohibits public equity investment in China, Colombia, Egypt, Morocco, Pakistan, Russia and Venezuela because they fail to meet a threshold score. Criteria factors for that score include political stability, transparency, productive labor practices, market liquidity and volatility, market regulation/legal system/investment protection, capital market openness, and settlement proficiency/transition costs.
Under the CalPERS proposal, companies would quality for a portion of the $225 billion pension fund’s investment by complying with CalPERS’ permissible market guidelines and the United Nations Principles for Responsible Investment.
In a news release, Charles P. Valdes, Investment Committee Chair, said “This approach will minimize our investment risks but keep our options open to global economic growth and opportunities in emerging markets like China. Some of these markets offer promising investment opportunities.” CalPERS board President Rob Feckner said selective investment in good companies in developing nations will be allowed, while maintaining “our strict standards for investment and keeping a sharp eye out for risks.”
The World Gold Council CEO James Burton is a former Chief Executive Officer for CalPERS. Among the pension fund’s investment is $500 million earmarked last month for a pilot commodities investment program. CalPERS currently invests 8.4% of its assets in the natural resources sector, focusing mainly in energy and raw materials production and distribution.
CalPERS plans to decide as early as next summer whether to create a new natural resources/commodities asset class within the pension fund. “Global demand for natural resources and proved systems to extract and deliver them will only increase,” said Valdes. “We will look into commodities future contracts and related investments to naturally complement, diversify and add value to our expanding securities investments in the energy and raw materials sector.
The pension fund’s new commodities investment policy was scheduled for introduction at this week’s CalPERS board meeting with final review by the Investment Committee at a later date. CalPERS will hire additional staff to administer the program, make investment decision, monitory risk and report on activities and performance as it gets underway.
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