The California Public Employees’ Retirement System (CalPERS) posted an 11.3% time-weighted return on its private equity portfolio in 2024, as the $544bn pension giant continues an aggressive push to reshape its exposure to the asset class, according to a report by the Wall Street Journal.
While the figure trailed the system’s internal benchmark, it significantly outpaced the State Street Private Equity Index, a broad industry performance gauge.
The results signal early success for a strategic revamp initiated in late 2022, led by Anton Orlich, Managing Investment Director for Private Equity at CalPERS. The overhaul aims to ramp up annual commitments, scale co-investments, and diversify beyond traditional large-cap buyouts into growth equity and venture capital.
Since the pivot began, CalPERS’ private equity exposure has surged from $50bn to over $92bn, with the fund on track to exceed its current $15.5bn annual commitment target — having already deployed $14.6bn in the first nine months of the 2024-2025 fiscal year.
“Our private equity performance ranks at the top of our peer group over both one- and three-year horizons,” Orlich said, citing internal data he will present to the board on June 16. “It’s a leading indicator that the strategy is working.”
CalPERS’ private equity portfolio now represents 17.9% of total assets, above its 17% policy target and well within its 22% ceiling. That figure has more than doubled since 2021, when the target stood at 8%.
Despite broader industry trends – marked by liquidity constraints, tepid distributions, and a backlog of unsold portfolio companies – CalPERS has continued to lean into the asset class. In 2024, the fund recorded $21.7bn in capital calls versus $9.6bn in distributions, reflecting its growth trajectory and long-term conviction.
CalPERS has also rebalanced its private equity allocation mix. While large-cap buyouts once comprised over 75% of new capital deployed, they now account for less than 50%. The fund has scaled its secondaries program, executing several billion dollars of deals annually to diversify across vintages.
In a notable shift, venture and growth equity made up 43% of new commitments in fiscal 2023-24, up from just 9% three years earlier. “The move into venture and growth has largely occurred post-correction,” said Orlich. “We believe this is an attractive entry point into a strong secular growth story.”
