March 12 (Reuters) – The California Public Employees’ Retirement System expects to pay 8 percent less to investment firms next year, Bloomberg reported on Wednesday.
Calpers, the largest pension fund in the United States, expects to pay fees of $930.7 million to investment firms in the fiscal year beginning July 1, down from over $1 billion this year, Bloomberg said. (bloom.bg/1EZYl27)
“The decline in expected fees is primarily related to the wind down of the ARS (Absolute Return Strategies) program, and secondarily related to better terms negotiated with outside managers, primarily in our real estate and private equity programs,” said Brad Pacheco, a spokeman for Calpers.
However, the benefits of these savings were partially offset by incentive fees paid to Calpers’ real estate partners when their returns exceed predetermined hurdle rates, he added.
The $300 billion fund said early in February that it had recovered around $900 million from settlements related to investment losses sustained during the financial crisis.
The fund was badly hit by the 2008 financial crisis, which wiped out roughly one-third of its wealth.
Calpers also projects to pay about $100 million less in fees for hedge-fund investments as it liquidates its hedge-fund program, Bloomberg said. (