New Delhi: Calpers, the California Public Employees Retirement System, the largest pension fund in the US, has investments worth around $1 billion (Rs4,200 crore) in over 55 Indian stocks, according to the company’s latest investment policy report. These stocks have earned the fund a composite return of 260% since their purchase; Calpers has recognized India as one of the best performers among emerging markets in its report.
The Indian government still has reservations about allowing its own pension funds to invest in stock markets, but there is no restriction on international funds.
Stock market analysts, who did not wish to be identified, said that Calpers would be looking to expand its exposure to the Indian stock market, given that it had earned good returns in the country. Calpers manages around $240 billion in assets and began investing in India in 2004.
India has been a fixture on the fund’s permissible list of emerging markets for equity investments—it is reviewed annually—since its entry in 2004.
In 2007, the Calpers board has decided that it will consider investing in 20 emerging markets. These markets include Argentina, Brazil, India, Israel, Malaysia, South Korea, Taiwan, Thailand and Turkey.
The decision was based on a report by its consultant Wilshire Associates, which prepared a short list after evaluating markets on several parameters including political stability, transparency and labour practices. The report said that India and the Philippines showed the most improvement since the previous edition of the report.
The Calpers board also decided that it would not consider investments in China, Colombia, Egypt, Pakistan, Russia, Venezuela, and Sri Lanka.
The pension fund, which provides retirement and health benefits to about 1.5 million state and local public employees and their families, had about $5.2 billion invested in emerging markets as of 31 December 2006.
Indian companies in Calpers’ portfolio include blue- chips such as Reliance Industries, Tata Steel, Tata Consultancy Services, Tata Motors, State Bank of India, Satyam Computer Services, Reliance Energy, Reliance Communications, Maruti Udyog, Ranbaxy Labs, Mahindra & Mahindra, Infosys, Larsen & Toubro, Indian Petrochemicals Corp., ICICI Bank, Hindustan Unilever, HDFC Bank, Bharti Airtel, Bajaj Auto, Cipla and Dr Reddy’s Labs.