Aging populations, subpar productivity growth and a once-in-a-century global pandemic led the Fed earlier this year to return its benchmark borrowing rate to near zero and to resume large-scale buying of corporate and government securities. The Washington Post explores the implications.
At CalPERS, Bienvenue, who holds the chief investment officer title on an interim basis, is implementing a new strategy that aims for higher returns by using borrowed money and increasing investments in private equity deals, which could be harder to sell in a sudden downdraft than publicly-traded stocks. The fund posted a 4.7 percent return for the fiscal year that ended June 30 and has averaged 6.3 percent over the past five years, short of what’s needed. “Whether 7 is doable or not is an open question,” said Bienvenue. “Even with leverage and even with private assets, we acknowledge that’s a tall order.”