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CalPERS updates emerging manager program; staff and partners highlight fund‑of‑funds, GP seeding/staking and direct commitments
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Summary
CalPERS staff and private partners described the system's multi‑pronged emerging manager program — direct investments, fund‑of‑fund vehicles, and GP seeding/staking platforms — and presented early outcomes, risks and steps to scale the program across private asset classes.
CalPERS staff reviewed the system’s long‑running emerging manager program and described a multi‑pronged approach that includes direct commitments, fund‑of‑fund platforms and GP seeding/staking partnerships.
Miguel Silva (Sustainable Investments) summarized CalPERS’ emerging manager history, noting commitments of more than $9.1 billion across multiple structures and a current net asset value in emerging managers of roughly $6 billion. He said direct investments, GP ceding/staking and fund‑of‑funds each have tradeoffs on fees, alignment and scale, and staff has increasingly moved toward direct commitments and GP seeding/staking to improve economics and alignment while retaining access to coinvestments.
John Greenwood (Private Equity) and representatives from partners GCM Grosvenor and TPG described specific platforms. GCM’s Elevate platform focuses on GP seeding: the investor provides capital and operating support in exchange for an equity interest in a manager’s management company, revenue share and potential carried interest. Grosvenor said it has sourced nearly 1,000 opportunities and is committed to a small number of high‑conviction GP partnerships. TPG Next described a similar model and presented four managers in its initial portfolio.
Staff and partners reviewed empirical research: emerging managers (particularly first‑ or second‑time fund managers) have a wider dispersion of outcomes but a higher share of top‑quartile performers when selected carefully. CalPERS staff said it will continue to coordinate emerging manager activity across private asset classes, reassess whether to add new fund‑of‑fund partners after current vehicles are deployed, and evaluate internal resources versus external platforms to scale diligence and deployment.
Board members asked about expected timing for performance signals, fee economics and how CalPERS would measure and validate managers’ diversity commitments in line with AB 890 reporting requirements. Staff said they will update the board in November with commitments reporting and survey insights.
