The Importance of Stewardship in Uncertain Times

The year so far has been marked by changes—unexpected, difficult, and sometimes disorienting changes. Colorado PERA has been around since 1931. It has been through a world war and a cold war, the dotcom crash and the digital revolution. In other words, while 2020 has been tough, it is neither the first nor the last year of seminal change.

In June, PERA released its Comprehensive Annual Financial Report. It answers, among other things, a common question about PERA: “How did PERA’s investments perform last year?” This is an important question to ask. Another question, asked a little less frequently, is this: “How is PERA positioning its investment portfolio for the future, a future that will continue to see changes?”

That question is answered in the recently released 2020 Investment Stewardship Report. Stewardship means “taking care of something.” In this case, “something” is members’ dollars. This report helps demonstrate the ways in which PERA is continuously evolving, adapting to an ever-changing environment, while keeping its fiduciary duty to members at the center of decision-making processes.

Highlights of the report include:

• PERA created the Investment Stewardship Division. Having resources dedicated to formalizing and advancing investment Stewardship initiatives demonstrates PERA’s commitment to this organizational priority.
• By consistently focusing on the most compelling expected risk-adjusted returns, PERA’s Real Estate portfolio has generally earned strong returns from investments in green buildings and affordable housing, as well as local Colorado properties, among many other investments.
• As an institutional investor, PERA uses its voice to advocate for transparency and disclosure in financial markets. Making information about PERA’s investment activities more accessible to our members and others who have a stake in PERA’s success is equally important. To that end, PERA is also increasing the transparency of its own investments by producing a number of short videos, hosted on copera.org.

Change seems especially acute in 2020, but the truth is that it’s an ever-present factor. Building an organization that can nimbly adapt to change and that takes the initiative to integrate a variety of considerations into investment decisions helps keep PERA relevant, innovative, and, ultimately, a source of value to our members.

You can find the complete 2020 Investment Stewardship Report as well as the Executive Summary here.

PERA On The Issues will be highlighting key sections in the coming months.

StewardshipThe practice of overseeing or managing something entrusted to one’s care. PERA’s approach to investment stewardship is focused on ensuring the financial sustainability of the fund that pays benefits to retirees and beneficiaries.StewardshipThe practice of overseeing or managing something entrusted to one’s care. PERA’s approach to investment stewardship is focused on ensuring the financial sustainability of the fund that pays benefits to retirees and beneficiaries.FiduciaryA person who manages money on someone else’s behalf and who has a sworn responsibility to manage those funds in the best interest of the client.