Pension Pulse

Pia Singh and Hakyung Kim of CNBC report S&P, Nasdaq close higher, snap 3-week losing streak as Wall Street shakes off rate hike fears: Stocks rallied Friday as traders cheered comments from Federal Reserve Chairman Jerome Powell at the annual central bank conference in Jackson Hole, Wyoming, that point to stronger-than-expected economic growth. The Dow Jones Industrial Average closed up 247.48 points, or 0.7% at 34,346.90, after being up more than 300 points at session highs. The S&P 500 gained about 0.7% to close at 4,405.71, while the tech-heavy Nasdaq Composite advanced 0.9% to 13,590.65, which was enough to help both indexes snap a three-week losing streak. However, the Dow logged a second-straight week of losses. The S&P 500 energy and consumer discretionary sectors both rose at least 1% on Friday. Petroleum company Valero Energy and toymaker Hasbro were among the day’s biggest gainers, advancing 2.8% and 5.7%, respectively. Optimism was fueled, in part, by Po...

A month ago, Eliyahu Kamisher of the Los Angels Times reported that CalPERS pension fund posts 5.8% gain, helped by stocks and private debt: CalPERS swung to a 5.8% gain in its latest fiscal year as the stock market rally and private debt buoyed the largest traditional public pension fund in the United States. The preliminary return for fiscal 2023 reported this week is a sharp turnaround for the California Public Employees’ Retirement System, whose 6.1% loss in fiscal 2022 was its worst showing in more than a decade. The gain left CalPERS holding $462.8 billion, enough to cover 72% of its future obligations, unchanged from a year earlier. It’s the first full fiscal year since CalPERS ramped up its private equity investments with a $25-billion bet while increasing the use of leverage and allocations to private debt. The results were mixed. Returns for the year that ended June 30 were driven by a 14.1% surge in publicly traded stocks and 6.5% on private debt, as private equit...

Alex Lynn of Private Equity International recently wrote a comment on how BCI stays liquid in an illiquid market: Liquidity is at a premium in 2023 as LPs the world over grapple with a comparative dearth of private equity distributions and a congested fundraising environment. It is for this reason that Canadian pension giant BCI finds itself in a rather enviable position. Under the leadership of global head of private equity Jim Pittman, the C$233 billion ($172.8 billion; €158.2 billion) public pension fund has spent much of the past decade using the secondaries market to cultivate a comparatively liquid portfolio of illiquid assets. “What we’re seeing is a knock-on impact with less liquidity coming back in terms of sales. Those pension plans [that have] allocated heavily to private equity are less liquid themselves, so they don’t have as much money to recommit to new funds,” Pittman tells Private Equity International. “The one thing that we’ve been doing for the past ...

Paula Sambo of Bloomberg reports Canada Pension Plan Investment Board joins startup at $100 million Reforestation Fund: Canada’s largest pension fund has joined a project to produce carbon credits by planting more than 100 native tree species on degraded land in Brazil’s Amazon region. Canada Pension Plan Investment Board will invest as much as $30 million in a reforestation fund managed by Sao Paulo-based Mombak Gestora de Recursos Ltda., said Peter Fernandez, chief executive officer of the carbon-removal startup. The investment from the Canadian pension fund, and a smaller outlay from the Rockefeller Foundation, brings Mombak’s first reforestation fund to its $100 million target, Fernandez said. The Canadian fund will also invest $500,000 in Mombak. The startup is tapping a shift in voluntary carbon markets where buyers pay more for projects that actually remove carbon, rather than so-called avoidance offsets that, for example, generate credits by keeping existing tre...