CalPERS reported a fiscal‑year return of 11.6% that exceeded the policy benchmark and helped increase the public employees’ retirement fund’s funded ratio to about 79% as of June 30. Investment staff said private assets and active management were primary contributors to the one‑year outperformance.

Steven Gilmore and other investment staff told the committee the fund had about $556 billion under management at June 30 and that the 1‑year return beat the benchmark by roughly 107 basis points (value‑add of 171 basis points overall, private equity contributing 105 basis points). Private assets accounted for roughly 34.6% of the portfolio and staff said that percentage is expected to rise gradually over time.

Staff emphasized liquidity and operational metrics. The office reported a liquidity ratio of about 1.3 and highlighted that roughly 65% of the portfolio is implemented via active management, including substantial amounts managed internally. Staffing improved slightly (vacancy reductions) and operating costs remain relatively low for a fund of CalPERS’ scale, staff said.

Market context and risks: Senior staff and a Wilshire consultant framed returns against a complex macro backdrop — softer U.S. labor markets, tariff‑related price effects, divergent global policy paths and ongoing geopolitical uncertainty. Investment staff said that rising yields in fixed income improved the return outlook for bond allocations but noted that credit spreads for non‑Treasury assets remain historically on the “richer” (tight) side. Wilshire’s peer review found CalPERS’ private equity performance ranked highly over 5‑year windows and that total fund rankings improved markedly over the 1‑ and 2‑year periods.

Ending: Staff and consultants said the results reflected a mix of portfolio composition, active management and favorable market moves during the year. Trustees asked detailed questions about positioning, private investment pacing and stress testing; staff reiterated ongoing scenario work and continued monitoring of liquidity and downside risk.