CalPERS Commits $80 Million to Californian Private Equity

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CalPERS announced Wednesday it had committed $80 million to a private equity fund focused on Californian companies. The commitment is part of the pension fund’s California Initiative program.

From a press release:

The California Public Employees’ Retirement System (CalPERS) has committed $80 million with GCM Grosvenor (Grosvenor) in a California-focused private equity fund. The new commitment will be deployed through a direct investment vehicle starting by the end of the current year.

The new fund will be known as California Mezzanine Investments and is the third phase in CalPERS’ California Initiative program. It will be managed by Grosvenor’s Private Markets team.

“CalPERS is committed to California,” said Ted Eliopoulos, CalPERS Chief Investment Officer. “It’s great to have a hand in stimulating job creation and economic growth in our home state as we seek the best risk-adjusted returns for the portfolio.”

The fund will seek to invest in Californian companies using mezzanine debt financing to assist in supporting their growth and expansion.

The California Initiative was established by the CalPERS Investment Committee in 2001 as a $1 billion private equity investment vehicle that invests in private companies in traditionally underserved markets, primarily, but not exclusively, located in California. The objective is to generate attractive financial returns. As an ancillary benefit, the California Initiative was designed to create jobs and promote economic opportunity in California.

Grosvenor is one of the world’s largest independent alternative asset management firms, with approximately $47 billion in assets under management. It manages multiple emerging manager programs for large institutional investors, including public pension plans and corporate plans. Grosvenor and its predecessors have been managing private equity investment portfolios since 1999.

CalPERS manages $300 billion in assets. The fund has a $31 billion private equity portfolio.