CalPERS takes equity stake in VC firm

January 30, 2001 (PLANSPONSOR.COM) - The California Public Employees' Retirement System (CalPERS) has boosted its commitment to private equity, investing $485 million in TPG Ventures, a new venture capital firm targeting investments in the technology arena.

TPG is a subsidiary of San Francisco-based Texas Pacific Group.

The equity stake represents a “new model of investing for institutional investors,’ according to Michael Flaherman, the investment committee chairman of CalPERS, the nation’s largest public pension system.

The TPG deal is the most recent investment made by CalPERS Alternative Investment Management program. The System has more than $16 billion invested or committed for investment in the private equity arena.

TPG, a new venture capital firm targeting investments in the technology arena, makes early- and late-stage investments in the technology, communications, and business resources sectors. Investments will be targeted between $1million to $20 million. Geographically, the investments are expected to be made in California and throughout the nation.

According to CalPERS, the investment includes four components:

  • $325 million to start the new venture capital fund;
  • $75 million for a new crossover fund that buys public and private securities;
  • $25 million for a new corporate venturing fund, to pursue forming new businesses with large corporations;
  • a $60 million equity stake in TPG Ventures.

Chuck Epstein