Key Takeaways
- • Calpers cut its directly held shares in the Magnificent Seven (Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, Tesla) by 26% in the first half of 2026, based on calculations from regulatory filings.
- • Calpers had total assets of $651.3 billion as of September 30, 2026, with private equity at $145.6 billion, or 22.4%, well above the board's 17% target set in March 2024.
- • Deputy CIO Anton Orlich said elevated public valuations and index concentration could weigh on relative returns, while private-market pricing looks more attractive.
- • Calpers posted a preliminary 14.8% net investment return for fiscal 2025-26, with funded status rising to 85% from 79%, the fund's best performance in five years.
- • The move comes as U.S. technology stocks face pressure over doubts about returns on AI spending, and the shift is being watched as a signal on large-cap tech concentration.
Summary
The California Public Employees' Retirement System (Calpers), the largest public pension fund in the United States, reduced the number of shares it directly holds in the seven largest technology names by 26% in the first half of 2026, according to calculations from regulatory filings. The holdings cut covers Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta and Tesla. Over the same period the fund increased its private equity position, a move intended to reduce the risk of excessive concentration in public-market holdings.
Deputy Chief Investment Officer Anton Orlich said in an interview that public equity valuations are relatively elevated and that concentration in a handful of large index constituents could weigh on relative returns. Private company pricing, by contrast, is more attractive, he said, and a larger private equity allocation provides a buffer when public markets weaken. Calpers' stated approach is to convert concentrated single-stock exposure into a model spread across hundreds of companies, trading liquidity for diversification.
As of September 30, 2026, according to the fund's monthly report, Calpers had total assets of $651.3 billion. Private equity accounted for $145.6 billion, or 22.4%, and public equities for $236.1 billion, or 36.3%. The board set a private equity target ratio of 17% in March 2024. Assets under management were $637.1 billion as of June 30, 2026. The fund's preliminary fiscal 2025-26 returns (ended June 30) were 24.1% for public equities, 17.0% for private equity, 11.0% for private credit, 6.3% for real assets and 5.9% for fixed income, for a total fund return of 14.8%. Private market valuations lag by one quarter and are as of March 31, 2026. Calpers said its rationale for shifting toward private markets rests on its judgment about future valuations and concentration rather than on relative performance, since public equities outperformed private equity in the year.
The 14.8% return exceeded the board's assumed long-term return of 6.8%. Funded status, which measures assets against future benefit obligations, rose to 85% from 79%. Since July 2026 the fund has operated under a "Total Portfolio Approach," approved by the board in November 2025, which evaluates each strategy by its contribution to the whole fund rather than fixed asset-class weights. Chief Investment Officer Stephen Gilmore said the fund will regularly and publicly test whether active management adds value, using a reference portfolio of 75% global equities and 25% U.S. Treasuries.
The repositioning preceded a sell-off in U.S. technology stocks after several large tech companies reported earnings, with investors questioning whether AI spending will translate into returns. Market observers are watching the Calpers shift as a signal on concentration in large technology stocks, and its reallocation could prompt other large institutions to re-examine top-heavy index exposure and allocation logic.
Deputy Chief Investment Officer Anton Orlich said in an interview that public equity valuations are relatively elevated and that concentration in a handful of large index constituents could weigh on relative returns. Private company pricing, by contrast, is more attractive, he said, and a larger private equity allocation provides a buffer when public markets weaken. Calpers' stated approach is to convert concentrated single-stock exposure into a model spread across hundreds of companies, trading liquidity for diversification.
As of September 30, 2026, according to the fund's monthly report, Calpers had total assets of $651.3 billion. Private equity accounted for $145.6 billion, or 22.4%, and public equities for $236.1 billion, or 36.3%. The board set a private equity target ratio of 17% in March 2024. Assets under management were $637.1 billion as of June 30, 2026. The fund's preliminary fiscal 2025-26 returns (ended June 30) were 24.1% for public equities, 17.0% for private equity, 11.0% for private credit, 6.3% for real assets and 5.9% for fixed income, for a total fund return of 14.8%. Private market valuations lag by one quarter and are as of March 31, 2026. Calpers said its rationale for shifting toward private markets rests on its judgment about future valuations and concentration rather than on relative performance, since public equities outperformed private equity in the year.
The 14.8% return exceeded the board's assumed long-term return of 6.8%. Funded status, which measures assets against future benefit obligations, rose to 85% from 79%. Since July 2026 the fund has operated under a "Total Portfolio Approach," approved by the board in November 2025, which evaluates each strategy by its contribution to the whole fund rather than fixed asset-class weights. Chief Investment Officer Stephen Gilmore said the fund will regularly and publicly test whether active management adds value, using a reference portfolio of 75% global equities and 25% U.S. Treasuries.
The repositioning preceded a sell-off in U.S. technology stocks after several large tech companies reported earnings, with investors questioning whether AI spending will translate into returns. Market observers are watching the Calpers shift as a signal on concentration in large technology stocks, and its reallocation could prompt other large institutions to re-examine top-heavy index exposure and allocation logic.
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