CalPERS has accelerated a strategic shift towards venture capital and growth equity, reshaping its private equity portfolio to improve returns and diversification, Bloomberg reports.

The $500bn pension fund increased growth equity exposure to 31% of private equity commitments in the fiscal year ended June 2024, up from 9% two years earlier. Venture capital accounted for 12% of commitments during the same period, following the launch of a dedicated programme.

At the same time, CalPERS cut allocations to large buyout funds to 58% from 91% three years earlier and increased middle-market exposure to 57%, according to data presented to its board. Overall private equity allocation rose to 17% from 13%.

“Growth and venture don’t just have higher returns on average, they also have some diversification from buyout,” said Anton Orlich, managing investment director of private equity at CalPERS.

The overhaul has coincided with a sharp improvement in performance. CalPERS’ $98bn private equity portfolio delivered annualised returns of 7.4% over the three years to June 2025, ranking first among the 30 largest US public pensions.

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