Key Takeaways
- • CalPERS' private equity portfolio delivered a 17.8% return in 2025, substantially outperforming the total fund's 15.4% return and demonstrating PE as a critical driver of institutional returns.
- • Newer PE vintages are meaningfully outperforming legacy holdings, with recent fund commitments (2022–2025) showing double-digit returns while older investments (2005–2012) generate more modest gains, signaling portfolio performance inflection.
- • The blended PE strategy combining mature legacy positions with newer investments is gradually overcoming historical underperformance, as articulated by Anton Orlich, managing investment director for private equity, in an exclusive interview with Markets Group.
- • CalPERS' total fund annualized returns stand at 8% (five-year), 7.1% (ten-year), and 7.6% (thirty-year) as of June 30, 2025, with PE serving as a top-decile performance contributor to overall institutional objectives.
- • Recent fund commitments including Advent International GPE X (2022, $650M, 18.9% return), Accel-KKR Capital Partners VII (2025, $180M), and 2SP I (2024, $600M) underscore CalPERS' continued capital deployment into growth-stage opportunities.
Summary
The California Public Employees' Retirement System achieved a notable performance milestone in 2025, with its private equity portfolio returning 17.8%, substantially exceeding the total fund's 15.4% return. This outperformance underscores the strategic importance of PE allocations within CalPERS' broader institutional investment framework and reflects a fundamental portfolio rebalancing toward higher-yielding asset classes.
The portfolio's success stems from a structural shift in vintage performance dynamics. According to Anton Orlich, managing investment director for private equity at CalPERS, newer PE vintages are progressively overcoming legacy holdings that have historically underperformed. Mature investments from the 2005–2012 period—including funds such as Advent International GPE V-D (2005, 42.7% IRR), Advent International GPE VI-A (2008, 16.3% IRR), and Advent International GPE VII-C (2012, 13.2% IRR)—continue to deliver meaningful but moderate returns. Meanwhile, recent commitments from 2022 onwards show stronger momentum, with funds like Advent International GPE X (18.9% IRR) and Advent Global Technology II (14.1% IRR) demonstrating the performance trajectory of newer capital deployment.
CalPERS has maintained disciplined capital allocation across its PE program, with significant commitments to diversified strategies. Recent fund commitments include $650 million to Advent International GPE X (2022), $600 million to 2SP I (2024), and $180 million to Accel-KKR Capital Partners VII (2025), reflecting sustained engagement with established and emerging PE sponsors across buyout, growth, and technology-focused mandates. As of September 30, 2025, the PE program achieved a since-inception Net IRR of 11.3% with a Net Multiple of 1.5x, demonstrating resilience across market cycles.
The PE portfolio's 2025 performance occurs within a broader institutional context: CalPERS' total fund annualized returns reached 8% over five years, 7.1% over ten years, and 7.6% over thirty years as of June 30, 2025. PE is explicitly characterized as "a very strong driver" in delivering top-decile returns for the total fund, validating the system's strategic commitment to alternatives. This trajectory reflects CalPERS' ongoing "total portfolio approach," adopted by the Board of Administration to increase investment transparency and optimize cross-asset allocation efficiency, ensuring that legacy underperformance is systematically displaced by higher-yielding vintage cohorts.
The portfolio's success stems from a structural shift in vintage performance dynamics. According to Anton Orlich, managing investment director for private equity at CalPERS, newer PE vintages are progressively overcoming legacy holdings that have historically underperformed. Mature investments from the 2005–2012 period—including funds such as Advent International GPE V-D (2005, 42.7% IRR), Advent International GPE VI-A (2008, 16.3% IRR), and Advent International GPE VII-C (2012, 13.2% IRR)—continue to deliver meaningful but moderate returns. Meanwhile, recent commitments from 2022 onwards show stronger momentum, with funds like Advent International GPE X (18.9% IRR) and Advent Global Technology II (14.1% IRR) demonstrating the performance trajectory of newer capital deployment.
CalPERS has maintained disciplined capital allocation across its PE program, with significant commitments to diversified strategies. Recent fund commitments include $650 million to Advent International GPE X (2022), $600 million to 2SP I (2024), and $180 million to Accel-KKR Capital Partners VII (2025), reflecting sustained engagement with established and emerging PE sponsors across buyout, growth, and technology-focused mandates. As of September 30, 2025, the PE program achieved a since-inception Net IRR of 11.3% with a Net Multiple of 1.5x, demonstrating resilience across market cycles.
The PE portfolio's 2025 performance occurs within a broader institutional context: CalPERS' total fund annualized returns reached 8% over five years, 7.1% over ten years, and 7.6% over thirty years as of June 30, 2025. PE is explicitly characterized as "a very strong driver" in delivering top-decile returns for the total fund, validating the system's strategic commitment to alternatives. This trajectory reflects CalPERS' ongoing "total portfolio approach," adopted by the Board of Administration to increase investment transparency and optimize cross-asset allocation efficiency, ensuring that legacy underperformance is systematically displaced by higher-yielding vintage cohorts.
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.