Venture Capital: CalPERS Will Fund $1B To Promote Diversity In Alternative Fund Managers’ Investments

CalPERS will route the funding through asset managers TPG Inc. and GCM Grosvenor.

The California Public Employees’ Retirement System (CalPERS), a pension fund with assets worth $457 billion, has announced that it is committing $1 billion to support diverse and underrepresented private market investors through asset managers TPG and GCM Grosvenor. (CIO)

The fund will be investing $500 million in TPG’s Next Fund and $500 million in GCM Grosvenor’s Elevate strategy. The Next Fund aims to back younger and underrepresented alternative asset managers while the Elevate strategy will make seed investments in small, emerging, and diverse private equity firm founders.

The goal of this investment is 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.

CalPERS also hopes that other global allocators will join this effort to re-imagine traditional and structural dynamics in the markets.

“We hope to generate attractive returns and catalyze meaningful opportunities for the next generation of small, emerging and diverse firm founders in our industry,” Michael Sacks, chairman and CEO of GCM Grosvenor, said in a statement.

“TPG NEXT seeks to address the talent gap through a suite of capital solutions and value-add support that is designed to address frequent pain points of new firms in a comprehensive way,” Pamela Pavkov, head of TPG NEXT, said in a statement. “Our aim is that this fund will not only advance diverse-led firms, but also the diverse communities that these managers are connected to.”

The move comes as the CalPERS board recently increased its allocation to private investments to 13% from 8% to help boost returns.

Related Story: CalPERS May Foray Into Private Debt

Photo by Christina @ on Unsplash

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