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CalPERS takes the really long view


Putting the best possible face on terrible financial news is something investor relations departments have had to get good at over the last year. Submitted for your approval, California Public Employees Retirement System (CalPERS)’s announcement yesterday of preliminary investment performance for the year ended June 30.

CalPERS conceded that the 23.4 percent haircut it took was the fund’s “most severe single year decline” (or as the folks at Dow Jones’ Private Equity Beat blog neatly summarized: “Worst. Year. Ever.”) Total assets fell from $237.1 billion last year to $180.9 billion. Still CalPERS chose to accentuate the positive (and also not mess with Mr. Medium-term Return )by pointing out that “even with this decline, its long term 20-year investment return remained positive at 7.75 percent.”

In the same “Stocks for the Long Run” vein, chief investment officer Joe Dear was quoted saying, “This result is not a suprise … The good news is we have the opportunity to capture future retuns because of our long-term investment horizon.” Of course, if your investment horizon is essentially “forever” then nothing short of a meteor destroying the Earth would qualify as a “material adverse event.”

Let’s start a collection of awful annual performance releases couched in reassuring language. Anybody seen a particularly choice one?


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