CalPERS Raises Private Equity Target to 17 Percent

The California Public Employees’ Retirement System has raised its private equity allocation target to 17 percent and introduced an 8 percent target for a private credit portfolio. CalPERS made the changes after reporting low returns and a multibillion-dollar funding gap. The system moved assets from traditional holdings into private equity and private credit.

Private equity assets are valued by the managers who oversee them rather than by market prices. Managers apply internal formulas to estimate company values instead of using current transaction prices. These valuations are updated infrequently. The practice can reduce reported volatility and produce steadier return figures during market declines.

Details on investment risk and fees for the private equity and private credit holdings remain undisclosed. The California Public Employees’ Retirement System has not released specific figures on costs or performance metrics for these portfolios.