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CalPERS spends $175m on 5 per cent stake in Carlyle

The California Public Employees' Retirement System also has an option to invest another $435m over the next two years.

Cementing its pioneering role as an institution investing in private equity, the California Public Employees' Retirement System (CalPERS) has bought a 5 per cent stake in Carlyle Group for $175m. In addition, CalPERS has invested $250m in Carlyle’s various funds. The pension fund has also secured an option to invest another $425m over the next two years.

The deal values Carlyle’s management company at $3.5bn, the highest value assigned to a private equity firm. Carlyle is one of the largest global private equity funds with more than $12.5bn of private equity capital under management.

“We have maintained a strong relationship with Carlyle over the past five years, and have been very pleased with the firm's performance,” William Crist, president of the calPERS board of administration said in a statement. CalPERS began its investment relationship with Washington-based Carlyle in 1996 with an $80 million investment in one of the funds.

Earlier in the week, CalPERS, which has total assets of about $170bn, paid $60m for a stake in Texas Pacific Group’s TPG Ventures.