Ever wonder how a large pension fund allocates its investments on behalf of its members? Most pension funds diversify their allocations across a wide variety of companies and industries whose performance yields attractive, long-term returns. These days, digital infrastructure is attracting significant investments from large pools of capital that pension funds hold.
California Public Employees Retirement System (CalPERS) approved $4.5 billion worth of infrastructure commitments in its November board meeting, according to IPE Real Assets. CalPERS disclosed that it is investing with DigitalBridge Group (NYSE: DBRG) for the first time. It is making a $500 million commitment to the DigitalBridge Strategic Assets Fund. At the end of 3Q22, DigitalBridge had nearly $50 billion in assets under management in global digital infrastructure comprising towers, fiber networks, data centers, small cells, and edge infrastructure, Inside Towers reported. DigitalBridge has set a goal to reach $100 billion in AUM by 2025.
CalPERS, headquartered in Sacramento, CA, is the largest public pension fund in the U.S. with current assets of approximately $428 billion. The organization represents more than two million retirees who have worked in California public schools, and with public and state agencies.
The pension fund also has placed $750 million into the IFM Global Infrastructure Fund that has nearly $65 billion AUM and is focused on markets supported by the Organisation for Economic Co-operation and Development. IFM GIF is an open-ended infrastructure investment fund advised by Sydney, Australia-based IFM Investors. In May, IFM Investors participated with DigitalBridge to acquire and take private data center operator Switch, Inc (NYSE: SWCH).
CalPERS also disclosed that it topped up three of its existing infrastructure partnerships.
It added $1.5 billion to the Tower Bridge Infrastructure Partners LP, a New York-based buyout fund managed by Global Infrastructure Partners. The partnership holds a $777 million portfolio with a net return of 4.8 percent for the past year. Tower Bridge Infrastructure Partners recently was featured as a co-investor in the GIP and KKR consortium that acquired co-control of Vantage Towers from Vodafone, Inside Towers reported.
The California pension fund placed another $1.3 billion into the Golden Reef Infrastructure Trust of El Segundo, CA, a $1.2 billion partnership with a one-year net return of 10 percent.
CalPERS also committed $501 million to Birmingham, AL-based Harbert Gulf Pacific Power, a $1.5 billion partnership that makes equity investments in North American power infrastructure with a 9.5 percent one-year net return.
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