CalPERS Commits $1 Billion to Fund Investor Entrepreneurship and Innovation in the Investment Industry
January 10, 2023
Communications & Stakeholder Relations
Contact: Nicole Ortega, Information Officer
(916) 795-3991 - newsroom@calpers.ca.gov
SACRAMENTO, Calif. – CalPERS today announced a $1 billion commitment aimed at identifying and supporting the next generation of investor entrepreneurs in the private markets.
CalPERS will partner with two of its long-standing asset managers, TPG and GCM Grosvenor, with each firm receiving a $500 million allocation from the pension fund.
CalPERS has been investing in newly established teams and partnerships in the investment industry for more than 30 years. This dedication to fostering entrepreneurship, diverse perspectives, and innovation has allowed CalPERS to identify opportunities in the global markets that might otherwise be overlooked, while simultaneously generating returns for the pension fund.
“CalPERS is committed to giving access and opportunity to new and innovative talent in the investment industry,” said CalPERS Chief Investment Officer Nicole Musicco. “We want to create and nurture an ecosystem that will serve as a catalyst to seed the next generation of diverse talent and foster different ways of seeing and solving problems.”
“We welcome and encourage other global allocators to join us in this effort and reimagine the traditional and structural dynamics in the markets.”
TPG, through its TPG NEXT fund, the firm’s strategy dedicated to investing in diverse alternative asset managers, and GCM Grosvenor, through its Elevate strategy, which is focused on making catalytic seed investments in small, emerging, and diverse private equity firm founders, will use their long-standing expertise and reputation to identify and cultivate the next generation of investors. Identified investment managers will gain access to the capital, resources, and expertise they need to mitigate business risks and prudently scale their firms in a competitive marketplace.
“We launched TPG NEXT to empower principal talent underrepresented in alternative assets to become next generation industry leaders,” said Jon Winkelried, CEO of TPG. “CalPERS’ announcement today and its anchor commitment to the inaugural TPG NEXT fund is an important step in mobilizing change in our industry. Together, we will bring financial and operational capital support to diverse-led firms, accelerating their growth and success and demonstrating their ability to generate competitive returns.”
“We are excited to work with CalPERS and other global allocators to elevate the next generation of private markets investment talent,” said Michael Sacks, Chairman and CEO of GCM Grosvenor. “This capital addresses an important market opportunity and will ensure talented investors have the ability to launch their own firms and deliver for their clients.”
This partnership also aligns with CalPERS’ expansion into the private markets. The CalPERS Board recently increased its allocation to private investments as an important component of achieving the returns needed to fulfill the retirement promises made to more than 2 million members.
Private Equity is the highest performing asset class in the CalPERS portfolio and its allocation was increased from 8% to 13% starting with the 2022-23 fiscal year.
Additionally, recent research from the National Association of Investment Companies indicates diverse private equity managers have consistently outperformed their peers. Diverse PE funds represented by the NAIC Private Equity Index produced higher net IRRs than the Burgiss Median Quartile in 83% of vintage years studied from 1998 to 2020.
The CalPERS initiative is part of a larger effort underway, including the development of a start-up investors manual and a June 2023 industry event connecting global allocators with investor entrepreneurs.
About CalPERS
For more than eight decades, CalPERS has built retirement and health security for state, school, and public agency members who invest their lifework in public service. Our pension fund serves more than 2 million members in the CalPERS retirement system and administers benefits for more than 1.5 million members and their families in our health program, making us the largest defined-benefit public pension in the U.S. CalPERS' total fund market value currently stands at approximately $449 billion. For more information, visit www.calpers.ca.gov.
About TPG
TPG (Nasdaq: TPG) is a leading global alternative asset management firm founded in San Francisco in 1992 with $135 billion of assets under management and investment and operational teams in 12 offices globally. TPG invests across five multi-product platforms: Capital, Growth, Impact, Real Estate, and Market Solutions and our unique strategy is driven by collaboration, innovation, and inclusion. Our teams combine deep product and sector experience with broad capabilities and expertise to develop differentiated insights and add value for our fund investors, portfolio companies, management teams, and communities. For more information, visit www.tpg.com or @TPG on Twitter.
About GCM Grosvenor
GCM Grosvenor (Nasdaq: GCMG) is a global alternative asset management solutions provider with approximately $73 billion in assets under management across private equity, infrastructure, real estate, credit, and absolute return investment strategies. The firm has specialized in alternatives for more than 50 years and is dedicated to delivering value for clients by leveraging its cross-asset class and flexible investment platform.
GCM Grosvenor’s experienced team of approximately 530 professionals serves a global client base of institutional and high net worth investors. The firm is headquartered in Chicago, with offices in New York, Toronto, London, Frankfurt, Tokyo, Hong Kong, and Seoul. For more information, visit: www.gcmgrosvenor.com.