CalPERS investment chief is big on new energy technologies
Date: Monday, November 12, 2007 @ 22:42:45 UTC
Topic: Investors


Mark Anderson - Silicon Valley / San Jose Business Journal

As chief investment officer for the nation's largest public pension fund, Russell Read looks at the big picture. Not so much the big picture today, but the one in 10 or 20 years.

In that crystal ball, he sees the vital importance of energy and commodities all over the world. Much of the existing economy is based on cheap oil. The not-too-distant future will require alternatives, and the California Public Employees' Retirement System is big enough to give alternatives a boost.

Future energy demand will create entirely new industries -- and fabulous financial returns. Read is piloting the system to invest in those technologies and companies.

Read joined CalPERS in June 2006. He hasn't made any dramatic changes at the pension fund, but pushed for more ability to invest in emerging markets, commodities and hedge funds...

There are a host of new technologies and fuel sources that will play a critical role meeting world energy demand, Read said, and many of them are clean sources. Market forces will create compelling long-term investment opportunities for CalPERS over the coming decade, and the system will play a constructive and profitable role, Read said.

Everybody wants to save the world, but CalPERS is in a unique position: With assets of more than $250 billion, it is big enough to do something about it.

"There are situations where our size can act to our advantage," Read said. The system can deploy enough money into a technology to make the difference between it happening and not happening "and allow us to use our scale to an advantage. It is essential we find opportunities where our scale can be used for us and not against us."

Getting new energy technology to the market runs against scale and competition with existing oil industry and a subsidized corn ethanol market...


The former hot industries of real estate, information technology and biotechnology aren't nearly as rich in potential as energy, Read said. Suddenly there's money going to research.

"This is significant," he said. "What will be surprising to investors and to the public will be the rate of technology change in the energy sector."

Source: CalPERS







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