The California Public Employees’ Retirement System (CalPERS), often seen as a bellwether for US institutional investments in private markets, has promoted Anton Orlich to deputy chief investment officer for private markets. The move is especially significant as it comes along with improved performance at the US$563 billion pension fund.
According to CalPERS, its total private equity portfolio earned a return of 21.5% in its last financial year ended March 31, while the roughly $47 billion invested under the current strategy since 2022 returned 35.8%. It says this was the best private equity performance among large US public pension funds in the 2026 fiscal year.
Orlich had been the managing investment director of private equity from 2022, as well as interim managing investment director of private debt in the last two years.
He also worked on private equity at CalPERS from 2013 to 2016, and was head of alternative investments at Kaiser Permanente from 2019 to 2022.
His private equity strategy, developed in the years since Covid-19, involves a heightened focus on manager selection, lower-cost structures, and diversification toward companies in venture, growth and middle-market buyout. As well as his new responsibilities at CalPERS, Orlich will continue to lead private equity until a replacement is found.
According to CalPERS, its fees as a percentage of total private equity assets has been slashed by 35% since 2024, while private credit as well as private equity has increased excess returns. The pension fund currently targets an exposure of some 17% of its total portfolio to private equity, with around $15.5 billion invested annually.
“We’ll continue to leverage the expertise of our investment team to partner with top managers and reduce costs,” Orlich says. “Investing in private companies gives us the opportunity to earn better returns for our members while diversifying the portfolio to limit risk.”
CalPERS reportedly seeks to make 40% of its commitments through co-investments to avoid higher fees and carried interest.
Needless to say, much has changed since the pension fund’s last financial year, with the war in the Middle East and the attendant inflationary pressures. It will be interesting to see whether this has a material impact on the success of Orlich’s strategy.
CalPERS may not be an act that all institutional investors can follow. Not every limited partner would be able to match it in securing and managing co-investments, let alone fee reductions.
Nonetheless, in a period where private equity has increasingly suffered challenges to its claims of market-beating returns, the pension fund’s approach to the asset class under Orlich definitely deserves scrutiny.
