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CalPERS writes $500m secondaries cheque for AlpInvest fund

It follows pension’s $300m investment in Ardian's ASF VIII in June, its first commitment to a secondaries fund in more than a decade.

After going more than a decade without committing to a secondaries fund, California Public Employees’ Retirement System has committed $800 million in the space of a year.

The Sacramento-headquartered pension has written a $500 million cheque for AlpInvest Secondaries Program VII, among 17 private equity commitments made in the quarter to 30 September, according to an investment update.

In June, CalPERS invested $300 million in Ardian’s ASF VIII, its first commitment to a secondaries fund since backing W Capital Partners’ 2007-vintage direct secondaries fund, according to Secondaries Investor data.

A ticket of $500 million ranks in the top decile by size for CalPERS, which began investing in private equity in the early 1990s. The pension has not invested with AlpInvest Partners before but is a long-time investor with its parent company Carlyle Group.

Last year CalPERS said it was exploring the expansion of its secondaries investment capabilities as a way of dealing with raging competition in the private equity market.

Speaking at an investment committee meeting in February 2019, Steve Hartt of Meketa Investment Group said that more direct investment, co-investment and secondaries investments could help CalPERS reach its target private equity exposure without having to rely on GPs and their fundraising cycle.

Without these additional investments, the pension giant would need to dramatically increase the number of fund commitments it makes each year to fulfil its $10 billion annual target: “That would be a lot for this structure, to be able to find 30 attractive investments per year that they can invest at that scale,” said Hartt.

In August, CalPERS’ chief investment officer Ben Meng stood down after less than two years in the role.