Calpers’ $4.5 Billion Venture Bet

Here’s a number that might surprise you: In the first six months of the year, California Public Employees’ Retirement System committed about $4.5 billion to venture capital funds, according to public filings. That’s almost 15% of the total capital raised by U.S. VC firms in the same period, and a staggering increase over Calpers’ 2022 commitments to VC funds, which totaled about $1.5 billion.

As most LPs take a step back from risky VC fund investments, California’s biggest pension fund is throwing cash at Sand Hill Road heavyweights. Why? Because it’s fearful of repeating past mistakes. In the wake of the 2008 financial crisis, a period Calpers dubbed “the lost decade,” the pension fund retreated from private equity, a strategy shift that lost it $11 billion in returns, it estimates.