CalPERS hikes private equity allocation to $6B, up by $1B

  • Pension system increases PE allocation by 20 percent
  • CalPERS channeled $5B to private equity last year
  • CalPERS earmarks 10 percent for direct investments

Real Desrochers, senior investment officer for the alternative investment management program for CalPERS, said the 1.7 million member pension system will hike its private equity allocation from $5 billion in 2012. About $3.8 billion of that $5 billion has been committed.

The pension fund is setting aside 10 percent of its private equity allocation for co-investing.

In August, CalPERS approved its biggest private equity commitment so far in 2013 with a pledge of $547 million to The Carlyle Group’s new flagship fund, Carlyle Partners VI LP. All told, CalPERS has about $3.7 billion in private equity capital and and unfunded commitments with the firm.

Another CalPERS favorite is Apollo Global Management, which has drawn $4 billion in invested capital and unfunded commitments.

The increased allocation from CalPERS comes after Buyouts reviewed documents that revealed that CalPERS’s private equity program had fallen below its 14 percent allocation target for the first time since the financial crisis. As of June of 2013, the program was $4.7 billion below its allocation target.

Desrochers, who was appointed to his current position in 2011, announced the allocation at an appearance at the Dow Jones Private Equity Analyst conference last month.

(Chris Witkowsky, editor of sister publication, contributed to this report.)

(Correction: This story has been updated to fix errors describing CalPERS commitment of $3.8 billion to private equity and its plan to set aside 10 percent of its private equity allocation for co-investing.)