Key Takeaways
- Geography: United States.
Analysis
The California Public Employees’ Retirement System (CalPERS) reported an impressive 11.3% return on its private equity portfolio for 2024, signaling the success of its strategic overhaul initiated in late 2022.
Under the leadership of Anton Orlich, Managing Investment Director for Private Equity, CalPERS has expanded its private equity allocation from $50 billion to over $92 billion. This growth reflects a significant shift in investment strategy, focusing more on venture and growth equity while reducing reliance on large-cap buyouts.
"Our private equity performance ranks at the top of our peer group over both one- and three-year horizons," Orlich stated. "It's a leading indicator that the strategy is working."
In the first nine months of the 2024-2025 fiscal year, CalPERS committed $14.6 billion to private equity, on track to surpass its $15.5 billion annual target. Private equity now constitutes 17.9% of CalPERS' total assets, exceeding its 17% policy benchmark and nearing the 22% ceiling.
The fund has also strengthened its secondaries program, executing several billion dollars in deals annually to diversify across vintages. Despite broader market challenges, including muted distributions and delayed exits, CalPERS continues to scale its presence in private equity.
In 2024, the fund recorded $21.7 billion in capital calls against $9.6 billion in distributions, indicating a robust investment pace. Orlich emphasized, "We believe this is an attractive entry point into a strong secular growth story."