Largest U.S. Pension Fund Solid After Bank Failures, It Says

The California Public Employees Retirement System (CalPERS), which has a combined exposure of $78 million in Silicon Valley Bank (SVB) and Signature Bank, says it is resilient following the mid-March failures of the two institutions.

Manager of the largest pension fund in the country, valued at $457.4 billion, CalPERS views its risk as minimal. “[I]n the grand scheme of things, CalPERS’ assets at risk are a small percentage of its assets under management,” Nicole Musicco, Chief Investment Officer, told the fund’s board during an investment meeting. The fund’s ability to withstand a “tumultuous” and “wild weekend” is testament to its resilience and transparency, she said.

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SVB was a high-profile lender to venture capital and startup companies that regulators shut down and the Federal Deposit Insurance Corporation took over after customers hurried to withdraw their money.

Recently, CalPERS has been building its private equity exposure.

Other institutional investors that have announced losses and exposure to SVB and Signature Bank include Norway’s sovereign wealth fund and Sweden’s largest pension fund, Alecta, SVB’s fourth largest shareholder. It reported losses amounting to 1.2 billion euros, or about 1% of its total managed capital, according to a statement.

“Alecta now values the shares in the two banks at zero,” the pension fund said, adding that the effect on its customers would be limited and its own financial position was “very strong.”