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Funds News

Suit aims to halt Calpers infrastructure investing

SAN FRANCISCO, Aug 13 (Reuters) - A group representing engineers employed by the state of California said on Wednesday it would sue Calpers, the biggest U.S. pension fund, to block it from investing in public-private infrastructure tie-ups.

Through its infrastructure program, Calpers could invest up to 3 percent of its funds in transportation, energy, natural resources, utilities, water and communications projects.

Toll roads, bridges and tunnels, airports, seaports and water projects are among the projects the fund sees as potential investments.

The 13,000-member Professional Engineers in California Government said it would file its lawsuit on Thursday against Calpers, the $234 billion California Public Employees’ Retirement System, because the pension fund’s investment policy on the partnerships threatens public-sector jobs.

“As written, services currently performed by Calpers members would be given to private firms,” the engineers group said in a statement. “Thus, the policy would encourage investing members’ contributions and retirement funds in public-private partnerships so members’ jobs can be outsourced to private firms.”

Calpers spokesman Clark McKinley said the fund could not comment on the suit without first seeing its initial complaint.

The Calpers infrastructure investment program was initiated by Russell Read, who recently left as the fund’s chief investment officer to start an environmental investment firm.

The fund’s board is set to vote next week on whether to move forward with the program, which is intended to hedge against inflation and provide moderate cash flow from public works that private companies operate or from privately built and operated infrastructure.

Investments also may be made in project partnerships between public entities and private companies.

“Provided that Calpers’ fiduciary responsibilities are met, it is not the intent of this policy for these investments to result in job losses to Calpers members,” fund officials said in a document to be presented to the fund’s board next week. (Reporting by Jim Christie; Editing by Braden Reddall)

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