Calpers is preparing to ramp up private-credit investments aimed at the energy transition and is weighing more capital for funds similar to one it already backs. The pension has a $800 million allocation with Goldman Sachs Asset Management in this strategy. Peter Cashion, who oversees Calpers' sustainable investment strategy, called the opportunity "underappreciated."
He contrasted the focus with mainstream private credit, noting, "Most private credit funds, they're doing asset-backed securities or senior lending to the standard corporates, but very few are specialized in green or brownfield energy projects." He added that the approach has, in some cases, produced "near equity returns for debt risk."
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Cashion's case for leaning into private credit in the transition space is simple: growth often comes easier with borrowing than by tapping public equity. "You've had all this equity that's been raised over the last four or five years for energy transition," he said. "But for companies to have proper profitability they need the leverage, they need the debt."
Back in February, Calpers indicated that the sweeping downturn in private credit - sparked by concerns that AI could disrupt software plays - did not shake its stance. At the time, Chief Executive Officer Marcie Frost said the pension is targeting an 8% allocation to the asset class.
Calpers oversees roughly $640 billion and has a $100 billion target for climate solutions by 2030. That bucket includes investments that reduce carbon dioxide, move away from fossil fuels, or help adapt to a warmer world. As of last year, $60 billion was already invested in those strategies. Cashion also said the fund is seeking more exposure to insurance-linked securities, an area he believes has the "size and scale" to contribute meaningfully to the $100 billion goal.
Fresh capital is flowing into the broader transition too. Net Zero Insights estimates $41.3 billion went into transition-related investments during the first half of 2026, and $11 billion of that came as debt. Meanwhile, BloombergNEF projects up to $750 billion could go into data centers this year, while the energy transition could attract more than $2 trillion. As Cashion put it, "As big as data center development and buildout is, climate transition is much bigger."
For everyday investors, the takeaway is that one of the largest public pensions sees room in private credit tied to the energy transition, backed by a view of solid returns and a very large opportunity set.
A Calpers shift into private credit pulls other money behind it. Get the free Market Briefs daily newsletter and follow the flows.
