The Investment Committee of CalPERS’ Board of Administration will meet next Tuesday.   The committee, which is comprised of all 13 members of the Board of Administration, is responsible for, among other things, investment strategies and policies.  On the agenda is for next week’s meeting is an update on the fund’s strategic priorities.  The slide presentation prepared for next week’s meeting identify the following three priorities:

• Proxy Access

• Climate Change

• Exploration of Income Inequality

According to the slides, “exploration” consists of the CalPERS staff reading up on income inequality (or as expressed in slides, a “comprehensive review of research and analysis related to income inequality and its impact, if any, on institutional investors”).  Apparently, the staff has already started reading because the slides include this quotation from Thomas Picketty’s book, Capital in the Twenty-First Century:

“When the rate of return on capital exceeds the rate of growth of output and income, as it did in the nineteenth century and seems quite likely to do again in the twenty-first, capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based.”

Thomas  Picketty is a Professor of Economics at the Paris School of Economics who focuses on income inequality (the slides also include a quotation by Dr. Horace “Woody” Brock critical of Professor Picketty).

The slides suggest that another objective of this exploration is a symposium on the subject in collaboration with the University of California.