CalPERS

Investment Strategy

CalPERS is the largest public pension fund in the United States, managing over $502 billion in assets on behalf of approximately 2 million members, including active and retired California public employees and their families. According to CalPERS’ Investment Office, the fund manages its portfolio across several major asset classes: public equity, fixed income, private equity, real assets (including real estate, infrastructure, and forestland), and liquidity.

The fund’s investment strategy is guided by its publicly available Investment Beliefs, adopted by the Board of Administration, which emphasize long-term value creation, risk management through diversification, and the importance of sustainable investment practices. CalPERS operates on a total fund perspective, meaning asset allocation decisions are made holistically rather than in isolated silos. The system’s current strategic asset allocation targets roughly 42% to global equity, 25% to fixed income, 13% to private equity, 13% to real assets, and 7% to other strategies including opportunistic investments.

In recent years, CalPERS has accelerated its pivot toward private markets. The Board approved increasing the private equity target allocation and expanding the real assets program to include more infrastructure and climate-related investments. This shift reflects CalPERS’ view that private markets offer a return premium over public markets that justifies the added illiquidity and complexity.

Private Equity & Alternatives Program

CalPERS’ private equity program is one of the largest institutional PE portfolios globally. The system has committed capital to hundreds of private equity funds across buyout, growth equity, venture capital, and special situations strategies. According to publicly disclosed board materials, the PE portfolio’s net asset value has exceeded $60 billion in recent periods.

CalPERS maintains relationships with a wide range of GPs, from the largest global firms (Blackstone, KKR, Apollo, Carlyle) to mid-market specialists and emerging managers. The system publishes a complete list of its private equity fund investments on its website, including commitment amounts, vintage years, and performance metrics — a level of transparency that is unusual among large institutional investors.

Typical commitment sizes range from $200 million to $1 billion or more for established managers. CalPERS has historically run an emerging manager program to provide access to smaller and diverse-owned firms, though the structure and scale of this program has evolved over time. The system also explores co-investment opportunities alongside its GP partners to reduce fee drag and increase direct exposure.

Real estate investments are managed through both direct holdings and commingled funds, with a focus on core and value-add strategies across U.S. and international markets. Infrastructure investments target essential services including transportation, energy, and utilities.

Recent Activity

CalPERS has been among the most active large LPs in the private markets over the past two years. The fund’s total assets surpassed $500 billion in 2024, reflecting both market appreciation and continued capital deployment into private markets.

Key developments include the expansion of CalPERS’ direct investment capabilities, particularly in private equity and infrastructure. The Board of Administration approved an updated strategic asset allocation in 2024 that increased the target for private equity and broadened the scope of real asset investments. CalPERS has also been vocal about its interest in climate-related infrastructure and sustainable investing, committing to net-zero portfolio emissions by 2050.

The system’s 2023-24 fiscal year performance showed strong returns across private market programs, with private equity continuing to be one of the highest-returning asset classes in the portfolio. CalPERS has also increased its use of co-investments and separate accounts to gain more control over portfolio construction and reduce overall fees.

How to Approach

CalPERS is one of the most transparent institutional investors in the world. Board meeting agendas, investment committee presentations, and detailed fund performance data are published regularly on its website. Fund managers considering an approach should start by reviewing these materials to understand current allocation priorities and investment themes.

The Investment Office accepts proposals from general partners on an ongoing basis. There is no formal RFP process for most private market investments. Instead, the team evaluates opportunities through its network of existing relationships, consultant recommendations, and inbound inquiries. CalPERS uses Meketa Investment Group, Wilshire Associates, and other consultants for certain asset classes.

Prospective GPs should be prepared to demonstrate a clear and differentiated investment strategy, a strong and stable team, institutional-quality operations and reporting, and a track record of consistent performance. CalPERS places significant weight on alignment of interests, including GP co-investment and fee structures that favor the LP. The system also evaluates managers on their approach to ESG integration and diversity.

Cold outreach is possible but competitive. Building relationships through industry conferences, consultant introductions, and co-investment networks tends to be more effective for gaining initial access. CalPERS staff regularly attend major industry events including the ILPA Summit, PEI conferences, and SuperReturn.