Marcie Frost, CEO of the retirement regime for Californian state employees CalculatesConsecrate a large part of its time to keep the policy outside the investment portfolio and to ensure that investments are aligned with the “best values of the council” for the fund.
“There is so much disinformation about how Calpers invests or does not invest, that I find that many of my time is spent informing and educating it, whether it is a group of stakeholders or people in the current administration who think that we have completely sold oil and gas, which is not the case.”
In many cases, according to Frost, it must explain how Calpers can reach the investment yields that align with the fundamental values of the fund, while filling the fiduciary responsibilities of the Employees of the State of California.
“Where I spend most of my time is to work with the board of directors, understand that this is how we align values … How can these capital allowances finance the things that are important for the board of directors and things that are important for the State of California, but everything in the fiduciary responsibility they have and that I have,” she said.
“For me, it is a question of ensuring that I am aligned with the Board of Directors, the main values of the Council for the Fund, diversity, equity and inclusion, and ensure that we continue to finance them.”
Support Big Oil’s transition
An area that requires education is the energy transition. Calpers does not just seek to reduce emissions from his portfolio, said Frost, but rather invested in cases with high carbon intensity in order to transit them.
“We think there are opportunities, not only at the national level, but also in the world, where we can invest in the energy transition and provide capital to go from something that could be a little brown to something greener,” she said.
Calpers unveiled a climate action plan of $ 100 billion in November 2023, aimed at doubled its allowances to clean energy projects by 2030. In November 2024, the state -managed pension fund said that it had initiated $ 53 billion to these projects in one year.
Calpers holds participations in several oil and gas companies, including most super-parameters. It was highlighted By the activist group California Common Good, who, during the same week as Frost, spoke to the Nexus event, said that the portfolio of climate solutions of the pension included $ 3.56 billion in assets in oil and gas companies.
“We have just published our report on climate investment for 2030 and there are surprised people that we have Exxon, that we hold Chevron,” she said. “But there are certain things that these companies do to make the transition at least part of their operations and we want to invest in these transitions.”
In addition to Exxonmobil and Chevron, Calpers has participations in BP, Marathon Petroleum, Western Petroleum, Shell and Valero Energy Corporation, as well as State and State Gashers in Abu Dhabi, Brazil, China, Malaysia and Saudi Arabia, according to California Common Good.
Go to a total portfolio approach
Calpers moved the way he allocates his $ 506.6 billion in assets to a “total portfolio approach”, a subject that Frost and Anton Orlich, director of investments managing the funds in the fund, discussed on stage during the event with Chip Kaye, president of Warburg Pincus.
Calpers undertook the transition to a total portfolio approach, also known as TPA, after hiring Stephen Gilmore as director of investments in July 2024, according to Frost.
Previously, the funds of the fund did not look at the asset classes when making investment decisions, a situation which was reinforced during the Pandemic COVID-19, she notes.
“For a while, we have really” really missed certain opportunities by not thinking more of asset classes, “she said.” This really is lower than the call list, but we want to be the first on the call list “.
Since the institution of a TPA, Calpers’ portfolio has passed more on the private markets and far from the public asset classes, according to Orlich.
“The Private Equity increased by four points, by withdrawing public equity, and this was really in accordance with the state of mind that there was competition for capital. On the side of private debt, we took three fixed income,” said Orlich during the same panel.