The California Public Employees' Retirement System board approved a new strategic asset allocation on Tuesday that raises its private equity target to 17% of the $550 billion fund, up from 13%, making it the single largest private markets sleeve in the portfolio.
The increase is funded by a reduction in public equity exposure, continuing a multi-year trend among the largest US public pensions of leaning further into illiquid strategies in pursuit of the private markets return premium.
Implementation timeline
CalPERS expects to reach the new target over a three-to-four-year implementation period, deploying primarily through existing GP relationships and its growing co-investment programme.