Investment returns at the nation's two largest public pension systems are back on track after suffering steep losses during the Great Recession of 2008-09.

The California Public Employees' Retirement System on Thursday reported that its investments grew by 12.5% in the calendar year that ended on Dec. 31. That's in line with a 12.1% gain posted for calendar year 2010.

The smaller California State Teachers' Retirement System ended the year with a 12.7% return.

Both funds' total performance bested their selected market benchmarks.

"We repositioned our portfolio to take full advantage of the overall gains in the market last year," said CalPERS Chief Investment Officer Joseph Dear. "The strong returns we saw in 2010 prove that our top-to-bottom evaluation of all our investments is paying off for our beneficiaries and our employers."

As of Jan. 18, CalPERS' total investment portfolio was valued at $228.5 billion. That's still 12% off its historic high of $260 billion in October 2007 but considerably better than the recession low of $160 billion in March 2009.

Last year, CalPERS' investment performance topped market benchmarks in all areas except real estate. Global stocks returned 14.6%, fixed income and bonds 11.6% and so-called alternative investments, such as venture capital, private equity, returned 21.5%.

Only CalPERS' real estate investments lost money last year, falling by 5.1%, compared with a market benchmark that grew by 9.3%.

CalPERS' performance for both its alternative investments and real estate reflected returns through the third quarter of last year because of a lag in reporting all financial data.

Growth in CalSTRS investments has pushed the fund back to its October 2008 level at $146.4 billion.

"This is very encouraging news, but the historic market declines of the 2008-09 financial crisis showed us that CalSTRS cannot solely invest its way to healthy long-term funding," said Chief Executive Officer Jack Ehnes.

Ehnes and his board of directors plan to ask the Legislature this year for a boost in employer contributions to the retirement fund. CalSTRS still faces a shortfall in the money it needs to meet its long-term financial obligations, Ehnes said.

For its part, CalPERS already has begun boosting contributions paid by its member employers, including state and local governments and school districts.

-- Marc Lifsher

If the green geniuses of the clean-tech world have their way, you won't have to be a Jetson to drive around in a car running on fuel produced from thin air. Soon, you could be eating dinner using utensils made from algae as the lights overhead shine using power beamed down from space. Gee-whiz ideas -- and the investments that fund them -- are coming fast and furious, Tiffany Hsu writes.

 

 

 

A major U.S. union came out swinging against China on Thursday, saying in fiery terms that the Asian giant was using illegal trade tactics to strong-arm Americans out of clean-tech jobs.

The United Steelworkers filed a 5,800-page petition with the U.S. trade representative alleging that China was giving Chinese firms unfair advantages over American companies.

The document complains that China used billions of dollars in subsidies, performance requirements, preferential practices and protectionist and predatory activities to dominate the solar and wind industries and other clean-energy sectors.

“This case draws a line in the sand,” said Leo W. Gerard, the union’s international president, in a statement. “We can’t rely on unending diplomatic niceties and non-productive photo opportunities masquerading as serious talks. We’re hemorrhaging jobs, seeing our bilateral trade deficit skyrocket and jeopardizing our future.”

Union Vice President Tom Conway proceeded to accuse China of “breaking every rule in the book.” Sen. Charles Schumer (D-N.Y.) jumped in, adding in a statement that “there is no question that China is ignoring trade rules so that it can cheat its way to first place in the clean-energy manufacturing race.”

The venture capital market in California slumped through a rough 2009 before showing signs of life in the last quarter, according to a report released Friday.

The weak period mirrored a national down year for these investments.

Venture capitalists dolled out $10.4 billion in 1,033 deals last year, compared with $15.6 billion in 1,246 deals in 2008. The one-third drop in value for California investing was slightly worse than the 31% drop nationally.

The numbers are part of a quarterly report from Dow Jones VentureSource, which bases its data on surveys of professional venture capital firms. National figures were released Thursday night.

Though overall value dipped from the third quarter to the fourth, the final three months fared better than the same months in 2008. Total investments in California companies increased 6% for the quarter over the previous year's quarter to $2.8 billion.

Jessica Canning, global research director for VentureSource, said the decline in California was expected. But she was surprised to find the brunt of the drag coming from the Bay Area -- mostly the result of a slowly recovering information technology industry.

“Overall Southern California has held up a little stronger,” she said.

Scott Sangster, president of Tech Coast Angels Los Angeles, a group of investors that funds local start-ups, said he expects investment volume and value to improve this year.

"There's nothing wrong with the creative spirit, the entrepreneurial spirit in Southern California," he said. "When we look back a year from now, 2010 numbers will be substantially bigger than 2009."

His group invested in 25 local companies last year for a total of $5 million, compared with 31 deals for $7 million in 2008.

The drop in venture capital hit the Los Angeles metropolitan area particularly hard. Investors doled out only $621.9 million in the last year, a 47% decrease compared with the year before.

Nationwide, venture funding of healthcare companies last year leap-frogged the long-time favorite, information technology, but in greater Los Angeles, IT captured more dollars -- $186.6 million -- than any other industry in the area.

-- Robert Faturechi