Private equity, hedge funds and real estate drove the California Public Employees' Retirement System, the largest pension fund in the United States, to achieve its best returns in nine years as the markets hit new highs.

Calpers, the pension fund for California state employees, earned a 19% return on its investments in the 12 months to the end of June, marking the fourth consecutive year the pension funds' return has been in the double digits. The 10-year average return on investments at Calpers is 9%.