California Public Employees’ Retirement System has increased its exposure to venture capital and growth equity as part of a broader overhaul of its private equity portfolio, shifting capital away from large buyout funds in favour of strategies with lower fees or higher return potential, according to a report by Bloomberg.
The pension fund, which manages more than $500bn in assets, increased growth equity to 31% of private equity commitments in the fiscal year ended June 2024, up from 9% two years earlier. It also launched a dedicated venture capital programme, which accounted for 12% of commitments during the year. Overall, CalPERS lifted its private equity allocation to 17% from 13%.
Commitments to large buyout funds fell to 58% of the portfolio in fiscal 2024 from 91% three years earlier, while exposure to middle-market strategies rose to 57% from 40%.
The restructuring has also coincided with improved performance. CalPERS’ $98bn private equity portfolio delivered an annualised return of 7.4% over the three years to June 2025, ranking first among the 30 largest US public pension plans. The fund is now committing more than $15bn a year to private equity, while increasing the use of lower-fee structures such as co-investments alongside general partners.
