US public pension Calpers plans to invest more than $25bn (£19.8bn) into climate-related private market investments.

Calpers is the biggest public pension in the US and the proposed investment would be one of the largest commitments by a major fund to unlisted climate assets.

The pension fund is reported to be considering deploying capital in the private equity, real estate and infrastructure markets, with a particular interest in Asia and Europe.

“Those are the ones [private market assets] that have very evident climate investment opportunities,” Calpers managing investment director, sustainable investments, Peter Cashion told the Financial Times.

Last November, Calpers committed to increasing its low carbon assets portfolio to $53bn, but this is the first time it has given any indication of where those investments might be focused.

The total portfolio is expected to reach $100bn by 2030 – more than double the initial $47bn in funds, although “we’re expecting [private markets will] represent more than half of the $53bn,” Cashion added. “It’s pretty significant.”

According to the Financial Times, the plans will create one of the world’s largest investors in climate solutions, at a projected $483bn fund.

Commenting on potential green real estate investments, Cashion said: “The measurement for what qualifies in your real estate portfolio as green is becoming easier.”

As such real estate will run alongside anticipated investment in renewable infrastructure and private equity investments in solutions for the clean energy transition.

Cashion also said that, as well as working with its existing asset managers, Calpers wants to work with “specialised, smaller managers who may well have access to deals that the bigger players do not”. 

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