Return on Inclusion | January 12, 2023

TPG NEXT secures $500 million from CalPERS for underrepresented alternative asset managers

Roodgally Senatus
ImpactAlpha Editor

Roodgally Senatus

ImpactAlpha, January 12 — Diverse managers, which includes women, LGBTQ+ and people of color, manage less than 2% of the trillions of dollars in alternative assets. San Francisco-based TPG launched TPG NEXT in March 2021 to invest in diverse alternative asset managers and investors from TPG’s balance sheet.

The firm has backed diverse-led venture firm Harlem Capital, Latino-led early-stage tech investor VamosVentures, and Black-owned real estate firm LandSpire Group. TPG NEXT will use the commitment from CalPERS to set up its first fund and already has lined up a pipeline of 150 diverse managers.

“To really address the talent gap in alternatives and bring our industry more in line with demographic trends, we needed to be able to scale this initiative,” TPG’s Pamela Pavkov told ImpactAlpha. Pavkov declined to disclose the size of the fund.

Return on inclusion

The U.S. Securities and Exchange Commission in October released a guide on diversity, equity and inclusion (see, “Policy Corner: Diversity in asset management).

CalPERS made the allocation to TPG NEXT as part of a mandate to give “access and opportunity to new and innovative talent in the investment industry,” said CalPERS’ Nicole Musicco. “We want to create and nurture an ecosystem that will serve as a catalyst to seed the next generation of diverse talent and foster different ways of seeing and solving problems.”

CalPERS also allocated $500 million to Chicago-based GCM Grosvenor to make seed investments in diverse-led and small and emerging private equity firms.