CalPERS has accelerated a strategic pivot toward venture capital and growth equity, reshaping its private equity portfolio to boost returns. The $500bn pension fund increased growth equity exposure to 31% of private equity commitments in its last fiscal year, up from 9% two years earlier. Venture capital accounted for 12% of commitments following a dedicated programme launch.

This overhaul reflects a deliberate move away from large buyout funds, which were cut to 58% of commitments from 91% three years prior. Middle-market exposure rose to 57%, and overall private equity allocation increased to 13% from 17%. CalPERS cited higher average returns and better diversification as key drivers for the strategic realignment.

The shift has coincided with a sharp performance improvement. CalPERS’ $98bn private equity portfolio delivered annualized returns of 7.4% over three years to June 2025, ranking first among the 30 largest U.S. public pensions. This success may encourage other large institutions to follow suit, particularly as they seek growth assets in a challenging market.