Key Takeaways
- • CalPERS, the largest US pension fund, plans to raise its venture capital allocation from about 1.4 percent to 10 percent of its private equity portfolio, according to PEI Private Equity.
- • The move represents a substantial expansion of the pension's exposure to a higher-risk asset class, with the Calpers board reportedly considering up to $5 billion in new venture capital commitments.
- • The VC increase is part of a broader private equity program strategy that also emphasizes increased co-investment activity.
Summary
The California Public Employees' Retirement System (CalPERS), described as the nation's largest pension fund, intends to expand its venture capital position from roughly 1.4 percent to 10 percent of its private equity portfolio, according to a PEI Private Equity report dated June 26, 2023 by Gregg Gethard and Lawrence Aragon.
The plan was outlined by Chief Investment Officer Christopher Ailman's team, with CalPERS planning to increase the amount of venture capital commitments in its private equity program to 10 percent, as stated by the pension's investment leadership. Publisher context indicates that the board could place roughly $5 billion of new capital into venture capital, which would make CalPERS one of the single largest US investors in the sector.
The shift is framed as a deliberate move into riskier, higher-growth strategies within a private equity program that is also being restructured to emphasize co-investments. Publisher coverage links the VC expansion to CalPERS' broader goal of growing its private equity exposure, and notes that the pension's private equity program was approved as a new commitment program at a June board meeting.
The allocation change would materially alter the fund's private equity risk profile and signals a significant commitment to venture capital for an institution of CalPERS' scale. Investors and managers in the VC ecosystem should expect a larger pool of institutional capital to be deployed in the sector over the coming commitment cycles.
The plan was outlined by Chief Investment Officer Christopher Ailman's team, with CalPERS planning to increase the amount of venture capital commitments in its private equity program to 10 percent, as stated by the pension's investment leadership. Publisher context indicates that the board could place roughly $5 billion of new capital into venture capital, which would make CalPERS one of the single largest US investors in the sector.
The shift is framed as a deliberate move into riskier, higher-growth strategies within a private equity program that is also being restructured to emphasize co-investments. Publisher coverage links the VC expansion to CalPERS' broader goal of growing its private equity exposure, and notes that the pension's private equity program was approved as a new commitment program at a June board meeting.
The allocation change would materially alter the fund's private equity risk profile and signals a significant commitment to venture capital for an institution of CalPERS' scale. Investors and managers in the VC ecosystem should expect a larger pool of institutional capital to be deployed in the sector over the coming commitment cycles.
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