CalPERS posted a gain of 20.7% in its investment portfolio for the fiscal year ending June 30, 2011, marking its largest market gains since 1997. CalPERS investments grew across the board: stock value is up 30.2%, private equity stakes increased 25.3% and real estate assets increased 10.2% in value. CalPERS investments now stand at $237.5 billion, up from $200.5 billion last year and $165 billion in 2009.
The average annual growth rate of CalPERS' investments plays a critical role in the cost of participation in the plan and employer contribution rates. CalPERS' critics regularly attack its target growth rate of 7.75% and make forecasts assuming a growth rate as low as 2-3%. However, as a result of its higher-than-expected growth, CalPERS now stands at 8.38% growth averaged over 20 years despite the big hits to the fund in 2008 and 2009 and appears well on its way to being fully recovered from the effects of the recession.
