Fascinating article in the NYTimes on how the nation’s biggest public pension fund, CalPERS, is doubling down on private equity – as the chase for higher returns kicks into high gear. Excerpts: “The nation’s biggest public pension fund is consistently short of the billions of dollars it needs to pay all retirees their pensions. It seeks higher returns. Even though some of CalPERS’s trustees have misgivings about investing in private equity, they say they have little choice. CalPERS, like many other pension funds, began putting money into private equity funds decades ago. But its reliance on such funds has increased in recent years, as low interest rates have made bonds less attractive & stocks have proven too volatile. Adding to the urgency are an aging population, expansive pension benefits that can’t be reduced and a major funding shortfall…..Data show CalPERS’s private equity returns are consistently lower than industry benchmarks, but private equity has still performed better than other assets and “has generated billions of dollars in additional returns because of our investments,” said a CalPERS’s exec.”
At Inveniam, we understand LP’s private equity investments need real-time pricing to leverage these assets appropriately. And this is exactly what we do.