Global pension funds in aggregate were above their median target allocation to private equity in the first quarter of 2025, according to S&P Global Market Intelligence data.

The median target allocation across 298 pension funds was $306.8 million, and the median actual allocation was $330.3 million, resulting in a $23.5 million overallocation.

Allocation takes on greater significance if public markets enter a sustained decline, resulting in an overallocation to private markets due to the denominator effect. The imbalance can restrict a pension fund’s ability to invest in additional private assets.

Over and under

Of the 298 pension funds, 174 had an overallocation to private equity.

California State Teachers’ Retirement System (CalSTRS) had the largest overallocation among pension funds, at $7.49 billion.

Montreal-based Public Sector Pension Investment Board came in second with a $6.02 billion overallocation.

Globally, 108 pension funds were underallocated.

Mexican fund Afore XXI SA de CV recorded the largest underallocation, which was $8.25 billion short of its $10.99 billion target.

Sjunde AP-fonden had the second biggest underallocation. The Swedish pension fund had a $5.20 billion allocation to private equity, versus its $13.01 billion target.

Top allocators

California Public Employees’ Retirement System recorded the largest private equity allocation at $90.37 billion. CalSTRS followed with $53.88 billion.

US-based Chattanooga General Pension Fund, Texas Abilene Firemen’s Relief & Retirement Fund and Burlington Employees’ Retirement System each had $1 million in allocation, the smallest among the pension funds.

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