CalPERS' New Captain

Ted Eliopoulos

Age: 43

Company: California Public Employees' Retirement System

Title: Senior Investment Officer, Real Estate

Time in current role: Two months

Biggest accomplishment: Led ground-breaking initiatives for clean energy and urban economic development as California Deputy Treasurer

Short-term goal: Maintain CalPERS' status as the investor of choice within the real estate industry

Ted Eliopoulos' resume reads like he was working from a checklist of jobs to prepare for his current role of steering the massive real estate portfolio of California Public Employees' Retirement System (CalPERS). From law and public policy to real estate development, he brings a seasoned approach to the position he took over in January.

Few commercial real estate executives have managed investments on a scale to match CalPERS' $18 billion in real estate holdings. The portfolio's returns consistently outpace the NCREIF Detailed Property Index, which tracks the performance of properties owned by CalPERS and other tax-exempt institutional owners. CalPERS' real estate yielded a 32.8% return in the three years that ended June 30, 2006 compared with the NCREIF index's 15.8% return for the same period.

For four years prior to his move to CalPERS, Sacramento-based Eliopoulos worked with numerous California investment funds as a deputy state treasurer. Named chief deputy treasurer in 2005, he managed an agency that oversees $60 billion in investment funds, says Phil Angelides, California's former treasurer. Angelides ran on the Democratic ticket in 2006 against Arnold Schwarzenegger.

“The Treasurer's Office has huge responsibilities,” Angelides says. “Ted ran that office and did an exceptional job. He's someone who has great integrity, impeccable ethics, and is a very hard worker who takes the time to understand issues and master them.”

Although he's new to the CalPERS payroll, Eliopoulos is no stranger to the nation's largest public pension fund. From 2002 to 2006, he represented the Treasurer's Office on the boards of CalPERS and CalSTERS, the California State Teachers Retirement System — what Angelides hired him to do.

“I knew if Ted sat for me on CalPERS and CalSTERS, he would always do the right thing,” Angelides says. “He had good integrity, good policy skills, and a willingness to work hard and to understand the issues he was grappling with.”

Eliopoulos earned a degree from the University of Virginia Law School in 1989 after graduating in 1986 from Dartmouth College. He began his career as a real estate lawyer in Los Angeles, and met Angelides in the early 1990s when both worked on events for the Democratic Party.

Eliopoulos served with the U.S. Department of Energy during the first term of the Clinton administration. He returned to California in the late 1990s to form a real estate development company in Sacramento, eventually moving to the public sector when he joined the Treasurer's Office in January 2002. Eliopoulos says his approach to real estate investing melds his legal training with hands-on development experience.

“I'm a California native and I grew up as the son of a California public teacher who worked over 30 years to earn a CalSTERS pension,” he says. “I know how important an institution CalPERS is for all the California families that rely on it to provide for their retirement security and health care needs.”

As an ongoing strategy to boost returns, CalPERS is placing more emphasis on non-core acquisitions as opposed to core properties, which are fully leased buildings in prime locations. While riskier, non-core assets can generate a higher rate of return through leasing or other improvements. Non-core properties made up 30% of the portfolio in recent years and increased to 34% at mid-year 2006.

“Looking out five to seven years, we're getting closer to having a portfolio that is 50/50 core and non-core,” he says, adding that CalPERS' strategic approach to real estate investing won't change radically under his watch. “I'm stepping into an office that already has a fundamentally well-structured portfolio and strategy.”

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