Calpers formalises direct investment strategy

The new strategy, Calpers Direct, consists of two funds – one focusing on late-stage investments in technology, life sciences, and healthcare, and the other on long-term investments in established companies.

The $350bn public pension fund plans to invest up to $13bn a year in private equity, in a bid to allocate 10% of its portfolio to the asset class. Its current allocation to PE is 8% as of June 2017.

By going direct, Calpers expects to pay out less fees to managers and enhance returns. Although private equity has been the fund's highest returning asset class, with a 10.6% annual return, it is under pressure to increase investment returns to meet liabilities.

Calpers aims to initiate Calpers Direct in the first half of 2019, pending board approval.

Unquote also understands that no decision has been made on last year's solicitation of a private equity strategic partner. The partner would assist Calpers in managing the private equity programme and increase co-investment, separately managed accounts and secondary activity. Hamilton Lane, Neuberger Berman, Goldman Sachs Asset Management, AlpInvest Partners, HarbourVest Partners and BlackRock are understood to be in the running.

Earlier this week, Calpers announced it was seeking a new chief investment officer, following the resignation of incumbent Ted Eliopoulos.

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• Topics
• LPs
• CalPERS
• Direct investments