Calpers faces PE target challenges

The consultant's review found that the PE commitments, amounting to $5.3bn during the fiscal year 2017-2018, were below the $6bn target. However, there was an increase compared to the previous year, where the commitments amounted to $3.3 bn.

The review will be presented at the pension scheme's investment committee meeting on 13 November, and Meketa concluded that Calpers' staff should keep developing creative alternatives, in a bid to deploy assets in attractive investments at scale.

The staff has proposed a strategic plan focusing on four pillars, including higher allocation to the emerging manager programme, expanding the list of high-quality general partners, and increasing direct investments through its innovation and horizon programmes.

Calpers has allocated 7.7% of its portfolio to private equity, versus its target allocation of 8%. The net asset value of the private equity holding has grown to $27.2bn as of June 2018, from $25.9bn in June 2017.

The pension scheme has recently committed $200m to Permira Growth Opportunities I, $366m to Carlyle Europe Partners V and $415m to Bridgepoint Europe VI.

The pension fund also recently appointed Yu Ben Meng as chief investment officer (CIO), following the resign of Ted Iliopoulos. The organisation has announced that Iliopoulos will leave by the beginning of 2019 in order to relocate to New York.

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