Saturday, April 20, 2024

CalPERS pledges $1bn to private market start-ups

  • CalPERS eyes diversity, private markets and innovation in $1bn shift
  • Group partnering with TPG and GCM Grosvenor Elevate
  • CalPERS CIO says negative position on hedge funds could be reversed

CalPERS, the $449bn Californian pension group, has earmarked $1bn to invest in the “next generation of investor entrepreneurs” in private markets strategies.

It is allocating $500m apiece to TPG, the $135bn San Francisco manager, and GCM Grosvenor Elevate, the $73bn Chicago manager, to make the investments.

TPG’s ticket will serve as the anchor investment in its NEXT fund designed to “empower principal talent underrepresented in alternative assets”.

CalPERS said it wanted to continue “fostering entrepreneurship, diverse perspectives and innovation” having invested in start-ups for more than 30 years.

“CalPERS is committed to giving access and opportunity to new and innovative talent in the investment industry,” said CIO Nicole Musicco. “We want to create and nurture an ecosystem that will serve as a catalyst to seed the next generation of diverse talent and foster different ways of seeing and solving problems.”

The move is part of its shift into private markets, with private equity the top performer in the CalPERS portfolio and its allocation scheduled to increase from 8% to 13%.

The group exited the hedge fund space in 2014 but Musicco said in an interview accompanying the $1bn shift that CalPERS could reassess its position.