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CalPERS to commit $500m to Blackstone special operations account

10 May 2012

The biggest pension fund in the US has announced a $500m commitment to a new global investment account managed by Blackstone, the world’s largest private equity firm.

California Public Employees’ Retirement System (CalPERS) will sink the money into Blackstone’s Tactical Opportunities Separate Account in the latest example of big pension funds using their muscle to reap greater benefits from large, diversified firms.

Big players such as Blackstone are increasingly looking beyond buyouts into areas such as hedge funds, credit and real estate offering big pension funds the chance to invest in special accounts across their investment funds.

In return for making big commitments, large investors are increasingly being offered lower management fees by firms keen to nail down significant capital.

The news follows a similar deal struck between Blackstone and the $70.5bn New Jersey Division of Investment, which recently pledged $1.8bn to the firm to be managed in a separate account.

In November last year the $110bn Texas Teacher Retirement System announced it would invest $6bn in a variety of asset classes including private equity in separate accounts run by Apollo Global Management and KKR.

CalPERS, which manages $238bn, has also announced a $400m commitment to Cerberus Institutional Partners V, which invests in distressed private equity and distressed securities including corporate debt and mortgage investments.

The pension fund said it also plans to commit $100m to both Credit Suisse Domestic Emerging Manager and Pacific Alliance Group’s PAG Asia I.

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