CalPERS will contribute $485m to the newly-formed company with the Swiss bank contributing the remaining $15m and acting as managing member.
The Golden State Matterhorn venture will target infrastructure investment opportunities in the US as well as globally.
CalPERS interim chief investment officer Ted Eliopoulos said, “UBS brings extensive experience and a proven track record in global infrastructure investing that makes them a great fit for this partnership.
“We’re excited to work with them as we identify and acquire core assets that will provide the best risk-adjusted returns for our portfolio.”
CalPERS’ infrastructure program looks for investments in public and private infrastructure, primarily within the transportation, power, energy, and water sectors.
The pension fund said that infrastructure investments returned 22.8 per cent during the 2013-14 Fiscal Year and 23.3 percent over the past five years, outperforming the benchmark by more than 17.2 percentage points and 16.6 percentage points respectively.
CalPERS currently holds approximately $1.8bn in infrastructure assets, with a total of $30bn in the real assets portfolio.
In July AltAssets reported that CalPERS saw private equity help push its overall return to 18.4 per cent for the last financial year as the LP’s overall assets passed $300bn.
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