Alternative Investments

The pension invests in funds run by Och-Ziff Capital Management Group LLC, Bain Capital LLC’s Brookside Capital and Lansdowne Partners LP, according to a report from Calpers. Its fund-of-funds investments include funds run by Rock Creek Group LLC and Pacific Alternative Asset Management Co.

Jonathan Gasthalter, a spokesman for Och-Ziff, and Stephen Labaton, a spokesman for Rock Creek, declined to comment. Bear Albright, a spokesman for Bain, didn’t immediately respond to a telephone call seeking comment after regular business hours. A Lansdowne spokesman, Andrew Honnor, didn’t respond to an e-mail seeking comment after regular business hours. Steven Bruce, a spokesman for Pacific Alternative at ASC Advisors, didn’t respond to a request for comment.

Calpers’ return goal is 7.5 percent. The annualized rate of return on its hedge fund investments over the last 10 years is 4.8 percent.

Hedge funds have amassed a record $2.8 trillion in assets as institutional investors pour money into alternative investments. McKinsey & Co. said last month that assets in alternatives, which also include real estate and private equity, may reach $14.7 trillion by 2020, double the current level.

Rise, Fall

Unlike traditional money managers, hedge funds can bet on rising as well as falling prices of securities, aiming to make money in any market environment. They generally charge fees of 2 percent of assets and 20 percent of returns, a level of remuneration that some institutions have balked at.

While Calpers was one of the earliest pension funds to invest in hedge funds, it has lagged behind many of its peers in increasing investments. The $60 billion Massachusetts fund has 9.5 percent of assets in hedge funds.

New Jersey’s state plan, with $81 billion in assets, has added more than $1 billion in new hedge-fund investments in fiscal year 2014.

Joe Dear, Calpers’ chief investment officer until his death from cancer in February, restructured the pension’s portfolio after he was hired in 2009 to steer the fund through the recession. He shed speculative real estate investments and focused on private equity, emerging markets, hedge funds and public-works projects to help meet the fund’s targets. Dear’s permanent replacement has yet to be named.