CalPERS Weighs Private Equity Changes, Direct Investment

CalPERS is conducting an internal review on its private equity portfolio and considering changes to the program, according to the Wall Street Journal.

The pension fund is looking to cut costs — although it’s not necessarily looking to cut its private equity allocation — and it’s weighing a variety of options. From Reuters:

It is considering moves that would give it greater latitude in selecting and managing its private equity investments in an attempt to reduce costs, the Journal reported.

Some of the options under consideration include buying a private equity firm or creating a private equity fund outside of CalPERS, the Journal said, or it could also choose to act as sole investor in more customized accounts with outside managers.

CalPERS has even considered asking its staff members to make private equity investments directly, the Journal added.

CalPERS’ private equity portfolio has returned 12.3 percent annually for the last 20 years, but would have achieved much greater return had it not been for fees.