The California Public Employees’ Retirement System(CalPERS)plans to allocate up to US$2.5 billion in a pilot infrastructure program.

The infrastructure program will take advantage of major investment opportunities in the construction of roads, bridges, airports, utilities, water systems and other projects.

Over the next five years, the United States will need to spend an estimated $1.6 trillion to improve its infrastructure.

“This new asset class should give us a hedge against inflation. It enhances diversification, gives us a bigger net in the market and reaches across private equity, fixed income, and real estate sectors,” says Charles P. Valdes, the pension fund’s investment committee chair. “CalPERS could become a major player in solving some pressing public policy problems related mainly to energy and transportation.”

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