CalPERS changes investment limits

The board of the California Public Employees’ Retirement System voted to more than double the amount of money its managers may place in investment funds that push for corporate and management changes.

The panel also increased how much the largest state pension fund in the U.S. can invest in hedge funds that aim to earn sizable returns regardless of how the stock market is performing.

The moves effectively lifted the amount CalPERS can invest in each sector from $5 billion to more than $10 billion.

The new cap on investments in “absolute return” hedge funds was set at 5% of CalPERS’ $245-billion overall portfolio. And holdings in so-called activist funds are now limited to 8% of the pension fund’s global equity portfolio of more than $150 billion.

“Global activism is on the rise,” Christy Wood, CalPERS’ senior investment officer for global equities, said Monday in a video link to a conference in Monaco on alternative investment. “Shareholders are increasingly taking an interest in what is happening in the companies they own.”

CalPERS had just $1 billion in activist funds five years ago, Wood said.