The California Public Employees' Retirement System (CalPERS) is looking to increase its commitments to the VC asset class. Sources informed FT that the fund could potentially ramp up its commitments to $5B in the next few years, up from the current ~$800M. The fund's interest in the asset class comes as it makes up for a "lost decade" of investments when it potentially lost out on $18B of returns after putting private equity investments on hold between 2009 and 2018, per chief investment officer Nicole Musicco. CalPERS is the biggest public pension scheme in the U.S., with $442B in funds under management. - The majority (73%) of its current portfolio is allocated to the buyout asset class, with just 1% earmarked for venture capital.
- The total private equity allocation is 13% of its overall portfolio, per managing investment director for growth and innovation Anton Orlich.
- CalPERS is undeterred by its recent losses in the VC asset class after writing off nearly $77M in investments in Silicon Valley Bank and Signature Bank.
- In the fiscal year ending June last year, the firm's private equity portfolio delivered 21.3% returns, making it the highest-performing asset class in its portfolio.
- The firm will invest in funds managed by high-quality managers and co-invest alongside them to save on fees and outperformance payouts.
- Additionally, the firm intends to increase its investments in Europe and Asia.
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