CalPERS Pledges $1B to Fund Private Market Startups

California Public Employees’ Retirement System (CalPERS) has pledged $1bn to invest in the “next generation of investor entrepreneurs” in private markets strategies.

The $449bn pension group will partner with two of its long-standing asset managers, the $135bn San Francisco-based TPG and the $37bn Chicago-based GCM Grosvenor Elevate, with each firm receiving $500 million.

Through Grosvenor’s Elevate strategy, CalPERS will invest in small, emerging and diverse private equity firms to help fund and scale growth. TPG 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 startups 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.”

Allocations to private equity, which CalPERS highlighted as the highest performing asset class in its portfolio, were increased to 13% from 8% for the 2022-2023 fiscal year.