Key Takeaways
- • CalPERS' $98 billion private equity portfolio delivered 7.4% annual returns over the three-year period ended June 2025, ranking first among the 30 largest U.S. public pension systems and demonstrating strong relative performance during a challenging investment environment.
- • Private equity now represents 18.5% of CalPERS' total $531.6 billion in assets under management as of December 31, 2025, exceeding the 17% long-term strategic target but remaining below the 22% ceiling, reflecting continued portfolio expansion in alternative assets.
- • CalPERS' 10-year internal rate of return in private equity reached 12.3%, substantially outperforming broader equity benchmarks and addressing what leadership has characterized as the pension system's "lost decade" through enhanced returns and portfolio diversification.
- • The pension system has promoted Anton Orlich to deputy chief investment officer for private markets, overseeing a $119 billion private equity office, signaling strategic prioritization of alternative asset management and succession planning within the investment division.
- • CalPERS continues to enhance private equity returns through portfolio sustainability initiatives, including labor principles integration and co-investment strategies alongside CalSTRS and other institutional investors seeking cost efficiency and enhanced yield.
Summary
CalPERS reported strong performance metrics for its private equity program, with the $98 billion portfolio delivering 7.4% annualized returns over the three years ended June 2025. This result positioned CalPERS ahead of the 30 largest U.S. public pension systems, a significant achievement given the volatile private markets environment during this period. The strong relative performance reflects the pension system's strategic reallocation toward private equity as a core component of its overall asset allocation strategy.
As of December 31, 2025, private equity comprised 18.5% of CalPERS' $531.6 billion total assets under management. This allocation exceeds the system's 17% long-term strategic target, indicating active overweighting in the asset class, though the portfolio remains positioned below the 22% maximum ceiling established by the board. The growing allocation underscores leadership's confidence in private equity's ability to generate superior risk-adjusted returns relative to public market alternatives.
CalPERS' 10-year internal rate of return in private equity reached 12.3%, substantially outperforming comparable Cambridge and State Street benchmarks. Leadership has characterized this performance as instrumental in addressing what the pension system previously described as its "lost decade," demonstrating how private equity exposure has enhanced long-term portfolio returns and helped restore investor confidence in alternative asset strategies.
The pension system has undertaken several initiatives to sustain and enhance private equity performance. Sarah Corr, Managing Investment Director for Private Equity, highlighted this year's strong results during board presentations. Additionally, CalPERS promoted Anton Orlich to deputy chief investment officer for private markets, succeeding Daniel Booth, who departed in October 2025. Orlich now oversees the $119 billion private equity office, reflecting organizational prioritization of private markets expertise and continuity in senior leadership.
CalPERS continues to pursue co-investment opportunities alongside CalSTRS and other institutional investors to optimize portfolio efficiency and cost structures. The pension system has also prioritized labor principles integration and sustainable portfolio construction as part of its broader private equity program enhancement strategy, positioning the system to capture both financial returns and policy alignment objectives across its private markets holdings.
As of December 31, 2025, private equity comprised 18.5% of CalPERS' $531.6 billion total assets under management. This allocation exceeds the system's 17% long-term strategic target, indicating active overweighting in the asset class, though the portfolio remains positioned below the 22% maximum ceiling established by the board. The growing allocation underscores leadership's confidence in private equity's ability to generate superior risk-adjusted returns relative to public market alternatives.
CalPERS' 10-year internal rate of return in private equity reached 12.3%, substantially outperforming comparable Cambridge and State Street benchmarks. Leadership has characterized this performance as instrumental in addressing what the pension system previously described as its "lost decade," demonstrating how private equity exposure has enhanced long-term portfolio returns and helped restore investor confidence in alternative asset strategies.
The pension system has undertaken several initiatives to sustain and enhance private equity performance. Sarah Corr, Managing Investment Director for Private Equity, highlighted this year's strong results during board presentations. Additionally, CalPERS promoted Anton Orlich to deputy chief investment officer for private markets, succeeding Daniel Booth, who departed in October 2025. Orlich now oversees the $119 billion private equity office, reflecting organizational prioritization of private markets expertise and continuity in senior leadership.
CalPERS continues to pursue co-investment opportunities alongside CalSTRS and other institutional investors to optimize portfolio efficiency and cost structures. The pension system has also prioritized labor principles integration and sustainable portfolio construction as part of its broader private equity program enhancement strategy, positioning the system to capture both financial returns and policy alignment objectives across its private markets holdings.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.