CalPERS Commits US$1 Billion to Private Markets Talent

The California Public Employees’ Retirement System (CalPERS) has issued two of its asset managers with US$500 million each to identify and support the next generation of investor entrepreneurs in private markets. Texan private equity (PE) firm TPG will invest through its NEXT fund, which is focused on investing in diverse alternative asset managers. “Together, we will bring financial and operational capital support to diverse-led firms, accelerating their growth and success and demonstrating their ability to generate competitive returns,” said TPG CEO Jon Winkelried. Asset manager GCM Grosvenor Elevate will be focused on identifying the next generation of investors. “This capital addresses an important market opportunity and will ensure talented investors have the ability to launch their own firms and deliver for their clients,” said Michael Sacks, the firm’s Chairman and CEO. CalPERS said fostering new talent in this way also helps the pension fund identify opportunities in global markets while simultaneously generating returns. It also aligns with CalPERS’ expansion into private markets, with PE proving to be the “highest performing asset class” in its portfolio; allocations to PE were increased from 8% to 13% within the 2022-23 fiscal year. Nicole Musicco, CalPERS CIO, said: “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. We welcome and encourage other global allocators to join us in this effort and reimagine the traditional and structural dynamics in the markets.”

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