The Wall Street Journal: Pension giant Calpers may take investing cue from Warren Buffet

The nation’s largest pension fund is considering a new strategy: setting up multibillion-dollar funds to buy and hold private companies for the long haul, replicating the approach of Warren Buffett’s Berkshire Hathaway Inc. BRK.B, -0.17%  .

California Public Employees’ Retirement System wants to be the sole backer of funding vehicles that will invest in technology startups as well as privately held businesses. The move would help Calpers cut its reliance on traditional Wall Street funds and slash hefty fees paid to those firms.

The plan, which needs to be approved by the Calpers board, could give the pension fund as much as $20 billion in new venture-capital stakes and positions in unlisted companies within a decade, investment officials said.

The proposal is part of a push by the roughly $355 billion state pension to boost returns and score access to coveted deals. Calpers has held months of protracted internal discussions on the future of its private-equity portfolio. The roughly $26 billion portfolio has underperformed its benchmarks over the past decade.

An expanded version of this report appears on WSJ.com.

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