Monday, March 21, 2011

CalPERS Targets $5 billion for Infrastructure

PEHub reported:

The California Public Employees’ Retirement System , the biggest U.S. public pension fund, will buy more direct stakes in infrastructure assets such as roads and airports, Reuters reported. The fund is targeting $5 billion in infrastructure investments over the next several years. CalPERS currently has $860 million committed to infrastructure, most through private equity funds including Carlyle Group and Alinda Capital, Reuters said.
While CalPERS will bypass p[rivate equity underwriter (PEU) funds for direct investment, look for PEUs to play a role:

Direct investments for CalPERS were likely to take place with it as a member of a consortium.

“There is one thing that we recognise about our programme, we are going to be building partnerships, and I mean that quite broadly, with partners who are capable, with fund managers and with others of our peers, in consortia.”.

All CalPERS needs are reasonably priced infrastructure assets.  Current state and local budget crises should provide numerous opportunities.  Will any middlemen be needed?  I envision new expanded terms to cover such development, like "public-private partnership pension PEU placement program (P7)."  Say that fast three times.

Don't forget international opportunities.  President Obama told Brazilians the U.S. would help them with infrastructure needed for the Summer Olympics and World Cup.  It happens The Carlyle Group loves infrastructure and Brazil.