CalPERS sells $1bn of private equity fund stakes

CalPERS has sold $1 billion-worth of private equity fund stakes.

The portfolio was sold to more than 10 different buyers due to its diversity in fund strategies, said one source familiar with the transaction. The names of the buyers were undisclosed.

A well-diversified portfolio often tends to be broken down in a sale to maximise price, while more thematic portfolios are typically more likely to sell to a single buyer.

The transaction was first reported by PE Hub.

UBS worked as the advisor on the transaction. UBS and CalPERS declined to comment.

The sale was part of a 5-year plan started in 2011 to decrease the number of relationships CalPERS has with general partners. The pension fund had 100 GP relationships as of 30 June, down from 132 when it started its strategic plan. The goal is to have about 30 relationships.

According to CalPERS’s private equity annual programme review released this week, about 63 percent of its private equity portfolio’s net asset value (NAV) is concentrated in 2006 to 2008 vintages and its fund-of-funds exposure is about $3.9 billion of NAV.

Buyout is the most prominent strategy in CalPERS’s private equity programme, representing about 58 percent of its NAV, while 12 percent is in credit-related strategies and 6 percent is in venture capital.

The programme’s five largest GP relationships are Blackstone, the Carlyle Group, Apollo Global Management, TPG Capital and Grove Street Advisors, representing about 35 percent of the programme’s overall net exposure, which represents cost in addition to unfunded commitments.

“Overall, PE is making progress, reducing costs and complexity in order to improve long-term performance,” CalPERS said in its annual review.