CalPERS may manage funds of private investors

The California Public Employees’ Retirement System may begin managing retirement money for people who aren’t public workers, putting it in competition with private mutual fund companies such as Fidelity Investments and Vanguard Group.

The largest U.S. public pension fund is considering a plan to expand by selling some mutual-fund-type products to private employers and investors in California as a way to generate fees, said Russell Read, the fund’s chief investment officer.

“There is the significant possibility of getting significant fee income,” Read told the board at a meeting in Napa, Calif., on Monday. “We’re looking at capitalizing on our strengths.”

The proposal is part of a larger plan being considered by the $225-billion fund’s board to expand retirement and healthcare services for its 1.5 million current and retired public workers. CalPERS had a 12.3% return in the year that ended June 30 as the value of its real estate, foreign stock and venture capital investments soared.

The pension fund has gained more than 10% during each of the last three years, helping it recoup from the losses it suffered during the stock market rout that began in 2000.