CalPERS Steers $7.6B to Private Debt, Equity 

The California Public Employees’ Retirement System (CalPERS) disclosed $7.5 billion in investment activity during the second quarter, with approximately 50% allocated to credit managers. 

The $532 billion Sacramento-based pension fund allocated around $2.9 billion in private debt strategies and is presently seeking a managing investment director for its $16 billion program. 

Sixth Street Madrone Strategic Holdings received $1.5 billion in private debt commitments, while Ares Management’s Senior Direct Lending Fund III received $1 billion. In late July, Ares closed its U.S. direct lending fund with $34 billion, which is the largest asset raise in private credit so far in 2024. 

CalPERS’ $85 billion private equity program received $4.7 billion, according to a public disclosure report. Many of the commitments were add-on allocations, including the quarter’s largest overall commitment of $2 billion to RedBird Capital Partners’ Lincoln Plaza Fund. 

The pension fund has allocated around 31% of its total investment portfolio to private markets. For the fiscal year ended September 30, the system posted strong annualized returns of 16% for private debt and 12% for private equity. New CIO Stephen Gilmore informed trustees that private equity’s relative underperformance was due to high public equity market returns.