The California Public Employees’ Retirement System (CalPERS) reportedly got a significant chunk of its private-equity holdings off its books in recent weeks. According to Bloomberg, the largest public pension fund in the nation has sold $6 billion of the stakes to second-hand buyers.
CalPERS was eager to sell some of its older investments as a way to tighten up its portfolio. Also, it allowed the fund to get some cash in the hands of its new investment chief Nicole Musicco. When approached for comment by Bloomberg, Musicco confirmed the sale but didn’t want to go into details.
“The sale positions us to act on our new asset allocation and allows us to capitalize on market opportunities,” Musicco told the media outlet.
In order to speed up the sale and facilitate such a big sale, CalPERS reportedly sold its private-equity stakes at a discount. It is estimated that the fund parted way with the assets for a 10% lower price compared to the one holdings had in September last year. However, on some assets, the discount was as high as 20%.
CalPERS will move forward with new asset allocation targets. As of July, the fund is looking to up its real estate assets to 15% from the current 13% and private equity from eight percent to 13%. On the other hand, the stock target dropped to 42% from the previous 50%.