CalPERS Introduces Private Equity Allocation
California Public Employees’ Retirement System (CalPERS) is adding private equity to one of seven pools of capital designed for select retirees, according to Buyouts Insider. This marks the first time such an allocation has been made, following a long-time reliance on returns from public equities and fixed income for these pools. The change applies specifically to a smaller judges’ pension fund among the seven pools.
Background on the Pools
CalPERS manages these seven pools of capital for select retirees, with the new private equity allocation targeting one of them. According to Buyouts Insider, the pension has historically depended on public equities and fixed income for returns, but is now diversifying into private equity. As a widely-known fact, CalPERS is one of the largest public pension funds in the United States, overseeing investments for state employees.
Details of the Shift
The introduction of private equity into this specific pool represents a departure from the pension’s previous investment strategy, as outlined in the Buyouts Insider report. This allocation is intended for the judges’ pension, which is part of the broader system for select retirees. While the article from Buyouts Insider does not specify further details, it highlights the move as a significant update to the fund’s approach.
Context and Implications
As a widely-known context, pension funds like CalPERS often adjust allocations to seek higher returns amid market changes, though this particular shift is limited to one pool according to Buyouts Insider.
