Pension Funds as LPs: GP Fundraising Guide 2026

By Dawid, Founder of Altss. Writing about allocator intelligence and fundraising strategy.

Global pension assets reached $58.5 trillion in 2024 across 22 major markets. In the US, state and local funds manage roughly $5.5 trillion, with alternatives now at 31.7% of average portfolios — up from under 10% two decades ago. Pensions allocate through consultant-mediated processes that take 9 to 18 months from first meeting to capital call. This article maps allocation mechanics, the decision chain, diligence expectations, and a targeting framework for GPs seeking pension commitments.

Why do pension funds require a different fundraising approach?

Most fundraising teams start with family offices because the decision chain is short: one or two principals, limited governance friction, fast timelines. Pension funds are the opposite. They are governed by boards, advised by consultants, constrained by investment policy statements, and accountable to beneficiaries and public oversight bodies. The check sizes are larger — often $50 million to $500 million per commitment — but the path to securing that commitment runs through layers that don't exist in family office fundraising.

The Altss family office and institutional investors database covers 9,000+ family offices alongside an expanding universe of institutional LPs including pension funds, endowments, and sovereign wealth funds. The First-Time Fund Manager Playbook covers institutional targeting broadly; this article provides the complete pension-specific map — from global market size and allocation trends through governance structure, consultant dynamics, and targeting strategy.

How large is the pension fund market?

Global pension assets reached $58.5 trillion in 2024 across the 22 largest pension markets (the "P22"), according to the WTW/Thinking Ahead Institute Global Pension Assets Study published February 2025. These assets represent 68% of the GDP of those economies. Seven markets — the US, UK, Australia, Canada, Japan, Netherlands, and Switzerland — comprise 91% of the total.

The 10 largest public pension funds globally, per fund disclosures and Global SWF data as of January 2025:

• Government Pension Investment Fund (GPIF), Japan — $1.6 trillion
• Federal Retirement Thrift Investment Board (TSP), US — $870 billion
• National Pension Service, South Korea — $800 billion
• ABP, Netherlands — $600 billion
• CalPERS, US — $558 billion
• Canada Pension Plan (CPPIB), Canada — $500 billion
• CalSTRS, US — $392 billion
• Central Provident Fund, Singapore — $380 billion
• PFZW, Netherlands — $300 billion
• Ontario Teachers' Pension Plan (OTPP), Canada — ~$190 billion

US public pension funds alone manage roughly $5.5 trillion across state and local plans, per Equable's State of Pensions 2025 report. That total is projected to reach $10.24 trillion by 2030 (Mordor Intelligence).

For fundraising teams, the reality is concentration. CPPIB alone has $143.86 billion committed to private equity — representing over 24% of its total assets — followed by CalPERS at $83.50 billion and CalSTRS at $53.70 billion. The top 20 global pension funds by PE allocation had committed over $707 billion to the asset class as of late 2024, per S&P Global Market Intelligence. The implication for GPs: winning a single pension commitment can anchor an entire fund.

How do pensions allocate — and what shifted?

The story of pension allocation over the past two decades is a sustained rotation from public equities and fixed income into alternatives.

The numbers. Between 2001 and 2021, alternative investments went from 14% to 39% of US public pensions' risky asset allocations, per Stanford GSB research by Begenau, Liang, and Siriwardane published in 2025. For every dollar pensions withdrew from fixed-income assets during that period, they invested $2.60 in alternatives. As of 2024, Equable reports that alternatives now constitute 31.7% of average US public pension portfolios, driven primarily by private capital investments at 13.4%.

The average US public pension portfolio as of 2024–2025, per publicplansdata.org:

• Public equities: 46%
• Fixed income: 23%
• Private equity: 10%
• Real estate: 8%
• Hedge funds: 6%
• Commodities / other: 4%
• Private credit: growing but often classified within fixed income or PE buckets

Larger plans allocate more aggressively. Wellington Management research shows that the 25 largest US public plans allocate more to private equity and real estate — and less to public equity and fixed income — than the 25 smallest. This tracks with what the OSINT methodology captures in real-time: larger plans have bigger investment teams, more consultant relationships, and the governance infrastructure to underwrite complex commitments.

Private credit is the fastest-growing sub-allocation. A 2024 global study found that private debt tops the preferred asset class list at 55% among pension funds surveyed, with direct lending and asset-backed finance attracting the most interest. CalSTRS cut its global equities allocation by 4 percentage points in 2023, redirecting 2% to a new standalone private debt allocation — the first time the fund had given private credit its own bucket. This creates openings for credit GPs that didn't exist five years ago.

What's driving the rotation. The Stanford research found that the primary driver isn't underfunding or risk-seeking behavior — it's beliefs. Pension managers and their investment consultants have become more bullish on alternatives' risk-return profile relative to public markets. The consultant effect is measurable: advisors' capital market assumptions for alternatives have risen by roughly 68 basis points since 2001, enough to account for the entire increase in pension allocations to alternatives.

Who actually decides on pension fund commitments?

Understanding the decision chain is the single most important factor in pension fundraising. Unlike a family office where the principal and the CIO are often the same person, pension commitments flow through a multi-layered governance structure.

Layer 1: The Board of Trustees. Sets asset allocation policy, approves investment policy statements, and often has final sign-off authority on individual manager commitments above a threshold (commonly $100M+). Board members are typically elected officials, political appointees, and beneficiary representatives — not investment professionals. They rely on staff and consultants.

Layer 2: Investment staff / CIO office. The CIO and investment team execute the board-approved strategy. They source managers, conduct initial screening, negotiate terms, and make recommendations. At larger plans like CalPERS or CPPIB, the investment team operates with considerable discretion. At smaller plans, the CIO may have authority only up to a defined threshold.

Layer 3: Investment consultants. Nearly all US public pensions retain one or more investment consultants — firms like Aon, Mercer, Cambridge Associates, Meketa, NEPC, or Verus. Consultants run manager searches, provide capital market assumptions that shape asset allocation, and issue formal recommendations that boards use as the basis for approval. The Stanford research found a direct link between consultant bullishness on alternatives and pension allocation to those strategies.

Layer 4: Investment committee / asset-class sub-committees. Many plans have sub-committees (private equity committee, real assets committee, etc.) that review and approve managers before the full board vote. These committees include staff, external consultants, and sometimes board members.

What this means for GPs: You cannot bypass the consultant. Even if you build a strong relationship with the CIO, the consultant must independently evaluate and recommend your fund. Building consultant relationships — attending their conferences, responding to their RFPs, presenting at their manager forums — is a parallel workstream, not a substitute for direct LP engagement. The LP Due Diligence Checklist covers the specific documentation pension consultants expect to see in your data room.

What does pension diligence look like?

Pension due diligence is more formalized and standardized than any other LP category. The ILPA Due Diligence Questionnaire (DDQ) Version 2.0, updated November 2021, has become the industry standard. Most pension consultants either use the ILPA DDQ directly or map their own questionnaires to it.

The core diligence areas, in order of emphasis:

1. Track record and attribution. Pensions want gross and net IRR, TVPI, DPI, and RVPI across all prior funds, broken down by vintage year. They want deal-level attribution: which investments drove returns, which didn't, and why. DPI — actual cash returned — carries more weight than paper gains, especially after the 2022–2024 distribution drought. The LP due diligence article covers the full metrics framework.

2. Team stability and key person risk. Pensions invest through 10-year lockups. They need confidence that the team making the commitment will still be managing the fund in year eight. Key person provisions, succession plans, and historical turnover data are non-negotiable disclosure items.

3. Operational infrastructure. Larger pensions conduct separate operational due diligence (ODD) parallel to investment diligence. They examine fund administration, valuation methodology, cybersecurity posture, compliance programs, and business continuity plans. A SOC 1 or SOC 2 audit is table stakes at most large plans.

4. Terms and alignment. Fee structures, GP commit levels, carry calculation methodology (whole fund vs. deal-by-deal), clawback provisions, and LPAC composition. Pensions benchmark every term against ILPA Principles and against their existing portfolio of GP relationships.

5. ESG and responsible investment. Particularly for European, Australian, and Canadian plans — and for a growing number of US public plans — ESG integration is a formal diligence category. The PRI/ILPA Responsible Investment DDQ covers governance and oversight, pre-investment processes, post-investment monitoring, and climate-specific disclosures. US state plans have varying political pressures on ESG, making this an area where understanding the specific plan's stance matters before the first meeting.

6. References. Pensions call other LPs in your existing funds. They call portfolio company CEOs. They call co-investors. The reference process is systematic, not informal — consultants often have standardized reference questionnaire templates. Weak references from existing LPs are among the fastest ways to lose a pension commitment.

What types of pension capital exist?

Not all pension capital is the same. The structure of the plan determines everything from investment horizon to governance to the types of strategies that fit.

Public defined-benefit (DB) plans — CalPERS, CalSTRS, New York State Common Retirement Fund, Teacher Retirement System of Texas — are the classic pension LP. Long-dated liabilities, perpetual capital base, board governance, consultant-driven. These are the plans with the largest alternatives allocations and the most established private markets programs. They commit primarily through commingled fund structures and through co-investments and separately managed accounts (SMAs) for large mandates.

Corporate DB plans have been in decline in the US and UK as companies freeze plans and shift to DC. Those that remain are typically in de-risking or liability-driven investment (LDI) mode — shifting from equities and alternatives toward long-duration fixed income to match liabilities. Corporate DB plans are less likely to make new GP commitments in 2026 unless the strategy directly supports de-risking (e.g., private credit, insurance-linked strategies). In Europe, many corporate plans remain active in alternatives, particularly in the Nordics, Netherlands, and Switzerland.

Defined-contribution (DC) plans — including 401(k) plans and the federal Thrift Savings Plan ($870 billion) — have historically been almost entirely in public markets. That is changing. In November 2025, SEC Commissioner Mark Uyeda gave a speech titled "The Diversification Deficit: Opening 401(k)s to Private Markets," citing CalPERS' 14.3% PE return for FY2024-25 and arguing that DC participants should have access to the same alternatives available to DB plans. Georgetown University modeling shows that adding just 10% private equity to a target-date fund improved participant outcomes across all market scenarios without increasing risk. This is an emerging opportunity — not yet a source of commitments — but GPs positioned in evergreen or semi-liquid structures should track the regulatory evolution closely.

What's changing in 2025–2026?

Several forces are reshaping how pensions allocate right now:

The distribution drought and the secondaries response. Pension funds operate on a reinvestment cycle: capital returned from existing funds gets committed to new ones. The slowdown in IPOs and M&A exits since 2022 has reduced distributions, leaving pensions with less free capital for new commitments. Equable reports steadily increasing negative net cash flows from contributions and benefit payments. This has driven pension participation in the secondaries market, where LPs trade PE fund interests to free up capital for new strategies. GPs running continuation funds or offering LP-led secondaries solutions are directly addressing this pension pain point.

Funded status improvement. US public pension funded ratios improved to an estimated 82.5% in 2025, up from 78.0% in 2024, per Equable. CalPERS reached 79% funded status after an 11.6% return for FY2024-25. Better funded status reduces pressure to chase returns through alternatives — but it also gives well-funded plans more confidence to make new commitments. The relationship isn't linear: the Stanford research found that funding levels explained only about 1% of the variation in pension allocations to alternatives.

Private equity performance continues to justify the allocation. The American Investment Council's 2025 Public Pension Study found that private equity delivered a median annualized return of 13.5% over 10 years across public pension portfolios. CalPERS' PE portfolio returned 14.3% in FY2024-25, adding $12.1 billion net of fees. Vermont's 10-year PE return was 20.48%. Massachusetts reported 18.5% over the same period. Every year since 2012, PE has been the top-performing asset class in public pension portfolios. With 94% of institutional investors planning to increase or maintain PE allocations, the bid for private equity from pensions remains intact.

The consultant influence is evolving. Major consultants have built or acquired their own fund-of-funds and co-investment vehicles (e.g., Cambridge Associates, Hamilton Lane, StepStone). This creates both opportunity — a single consultant relationship can drive allocation across multiple pension clients — and complexity, as the consultant may compete for the same co-investment slots. The Fund of Funds article covers this channel in detail.

Tariff volatility and risk management. The April 2025 tariff-driven market drawdown tested pension portfolios. CalPERS' assets temporarily dropped from $556 billion to $508 billion before recovering. Equable's 2025 volatility analysis shows pension funds prioritizing stress testing and scenario modeling. For GPs, the implication is direct: pensions want to see how your portfolio and cash flows behave in adverse scenarios. Risk analytics and downside framing are no longer optional in your diligence package.

How should GPs target pension funds?

Step 1: Identify the right universe

Not every pension fund is a viable prospect. Start by segmenting on three dimensions:

Alternatives allocation policy. Plans with existing private equity or private credit allocations are re-upping and expanding. Plans without alternatives programs are typically in the early stages — targeting them requires a different timeline (18–24 months) and often requires the consultant to recommend establishing the allocation first. Use Form ADV filings, annual reports, and CAFR (Comprehensive Annual Financial Report) disclosures to identify current allocations.

Fund size threshold. Plans below $1 billion in total assets rarely have dedicated alternatives programs or the governance infrastructure to underwrite complex private market commitments. The sweet spot for GP targeting is plans with $5 billion to $100 billion in total assets — large enough to commit $25M+ per manager, small enough to value the relationship.

Geographic and regulatory fit. US state pension plans are subject to state-level investment regulations, some of which restrict alternatives allocations. Canadian plans (CPPIB, Ontario Teachers', CDPQ, BCI) are among the world's most active private markets investors and operate with greater flexibility. European plans vary by country — Dutch plans are deep in alternatives, while UK corporate DB plans are largely de-risking. The Global SFO Migration article covers regional capital flow trends that also apply to pension geography.

Step 2: Map the decision chain before reaching out

For each target pension fund, build a decision map before the first email:

• Who is the CIO? When were they appointed? What was their prior role — another pension fund, a consultant, an asset manager? Prior-role context tells you their investment biases and network.
• Which consultant(s) do they retain? This is public information. RFPs, board minutes, and CAFR disclosures identify consultant relationships. If you're not in that consultant's universe, getting on their radar becomes a parallel workstream.
• What is the board approval threshold? Some boards approve all commitments; others delegate to the CIO below $50M or $100M. Knowing the threshold tells you whether your process ends at the staff level or requires a board presentation.
• What is the plan's current alternatives pacing model? Board-approved pacing plans tell you how much capital the plan intends to commit this year and in which strategies. If they're fully committed for the year, no amount of relationship-building will accelerate the timeline.

Altss tracks real-time allocator signals — including personnel moves, RFP publications, conference attendance, and mandate changes — that give GPs early visibility into pension commitment windows. The OSINT methodology article explains how these signals translate into actionable timing intelligence.

Step 3: Build the consultant relationship in parallel

Investment consultants run the screening process for the majority of US pension plans. The approach:

• Respond to consultant RFPs and database requests. Mercer, Aon, Cambridge, Meketa, NEPC, and Verus all maintain manager databases. Getting into the database is the minimum entry requirement. Consultants won't recommend managers they haven't formally reviewed.
• Present at consultant-hosted manager forums. Most major consultants run annual or semi-annual forums where GPs present to their client base. These are not conferences — they're structured evaluation events. Treat them like diligence meetings.
• Provide quarterly updates proactively. Consultants monitor managers across their advisory relationships. GPs that provide consistent, high-quality quarterly reporting (following ILPA standards) build credibility over time. Consultants notice when reporting is late, inconsistent, or below institutional grade.
• Understand the consultant's house view. Each firm publishes capital market assumptions and asset class outlooks that shape their recommendations. If Cambridge Associates is bearish on growth equity and your fund is growth equity, you need to address that positioning directly.

Step 4: Prepare institutional-grade materials

Pension-grade materials go beyond the standard pitch deck. The minimum package:

• ILPA DDQ 2.0 — fully completed, reviewed by counsel, current as of the most recent quarter
• Track record schedule — gross and net performance by fund and by vintage, with deal-level attribution for at least the most recent two funds
• Risk analytics — factor exposure, downside scenarios, stress test results, and correlation analysis relative to public market indices
• Operational diligence pack — organizational chart, compliance manual summary, cybersecurity posture, business continuity plan, and SOC report (if available)
• ESG/RI policy — even a brief statement is better than nothing; a formal policy aligned with PRI guidelines is expected by non-US plans
• Reference list — prepared in advance, with LP references, portfolio company references, and co-investor references who have agreed to be contacted

The LP Due Diligence Checklist provides the complete framework.

Step 5: Align your timeline to the pension cycle

Pension commitments follow annual or semi-annual pacing plans approved by the board. The typical cycle:

• Q4–Q1: Board approves asset allocation and pacing plan for the coming fiscal year. This is when the budget for new commitments is set.
• Q1–Q2: Investment staff and consultants source and screen managers against the pacing plan. RFPs are issued for new mandates.
• Q2–Q3: Due diligence, on-site visits, reference calls, and consultant evaluation. Multiple rounds of committee review.
• Q3–Q4: Final recommendation to board. Board vote. Legal documentation and closing.

For plans with June 30 fiscal year-ends (most US state plans), the window for GP introductions is September through February — after the prior year's board approvals but before the current year's commitment slate is filled. GPs who show up in April are typically too late for the current cycle. The 2025–2026 Event Playbook maps the conference calendar where pension CIOs and consultants cluster, including SuperReturn, ILPA Summit, and regional pension conferences.

How should emerging managers approach pension funds?

Emerging managers (Fund I–III) face additional hurdles with pension funds. Most plans have formal emerging manager programs with dedicated allocations, but these programs vary in commitment size and accessibility.

Plans with established emerging manager programs include CalPERS, CalSTRS, New York Common, Illinois State Board of Investment, and several city and county plans. These programs typically commit $10M–$50M per manager and may have lower minimum fund size requirements. Some are managed by external fund-of-funds gatekeepers (e.g., Grosvenor, Hamilton Lane) on behalf of the pension.

The anchor investor angle. A pension commitment — even a $15M emerging manager allocation — provides institutional credibility that accelerates the rest of the raise. The Anchor Investor Playbook covers the mechanics of using early institutional commitments to build fundraising momentum.

Diversity mandates. Several US state and city plans have explicit mandates to allocate a percentage of alternatives capital to women-owned, minority-owned, and emerging firms. These mandates are publicly documented in investment policy statements and board resolutions. They represent a tailwind for qualified emerging managers and should be identified early in the targeting process. The How to Raise Your First Fund article covers emerging manager fundraising strategy end-to-end.

What does the global pension landscape look like outside the US?

Canada. The "Maple 8" — CPPIB, Ontario Teachers' (OTPP), CDPQ, BCI, AIMCo, PSP Investments, HOOPP, and IMCO — are among the world's most active private markets investors. They invest directly, co-invest heavily, and operate large in-house teams. CPPIB's $143.86 billion PE allocation dwarfs most US plans. Canadian plans often prefer separately managed accounts and co-investment rights over standard commingled fund commitments.

Netherlands. ABP (~$600 billion) and PFZW (~$300 billion) have been leaders in alternatives allocation for decades. Dutch plans are also among the most progressive on ESG integration. The 2023 Dutch pension reform, transitioning the system toward more DC-style individual accounts, may reshape allocation patterns over the coming years.

Japan. GPIF ($1.6 trillion) is the world's largest pension fund but historically conservative — only 1.46% of its portfolio was in alternatives as of March 2024, with just 0.28% in private equity. However, the value of those holdings grew 46% in 12 months, and GPIF has publicly stated intentions to increase alternatives exposure. Even modest percentage increases at GPIF's scale represent billions in new commitments.

Australia. Australian superannuation funds collectively manage over $3.5 trillion, with several "super funds" (AustralianSuper, UniSuper, Aware Super) actively expanding private markets allocations. The Australian market is consolidating — smaller funds merging into larger ones with more capable investment programs — creating new opportunities for GPs.

UK. The UK market is bifurcated. Corporate DB plans are largely de-risking via LDI and buy-in/buy-out transactions. The Local Government Pension Scheme (LGPS), however, remains active in private markets, and UK DC plans are beginning to explore alternatives allocations following regulatory encouragement.

What mistakes do GPs make with pension funds?

Underestimating the timeline. From first meeting to first capital call, plan for 12–18 months minimum. GPs who need a pension commitment to hit a first close deadline are already too late to start the process.

Ignoring the consultant. Building a relationship only with the CIO while neglecting the plan's consultant is a common and expensive mistake. The consultant's recommendation is often the single most influential input to the board decision.

Presenting like a family office pitch. Pensions don't want a compelling narrative about market opportunity. They want risk-adjusted returns, attribution analysis, factor exposure, and operational infrastructure. Lead with data, not story. The Family Office Targeting Strategy is a useful contrast — different LP types require different presentations.

Sending the same DDQ to every plan. Each pension has different ESG requirements, reporting preferences, and side letter expectations. Customizing the DDQ for each prospect — particularly around ESG positioning and fee transparency — signals institutional readiness.

Neglecting DPI. After 2022–2024's distribution drought, pension CIOs and consultants are focused on realizations. A GP with a 2.5x TVPI but 0.3x DPI will face harder questions than a GP with 1.8x TVPI and 1.2x DPI. Prepare to explain your distribution strategy and exit timeline in detail.

Where do pensions sit in a diversified LP base?

Pensions are the ballast of an LP base — large, slow-moving, and deeply diligenced, providing anchor commitments that signal institutional credibility to every other LP category. A well-constructed LP base typically combines pension capital with faster-moving allocators:

• Family offices for speed, flexibility, and co-investment capacity — tracked in real-time through the Altss family office database
• Endowments for long time horizons and deep alternatives programs
• Fund-of-funds for emerging manager access and institutional validation
• Pension funds for large anchor commitments and multi-vintage relationships
• Insurance companies for fixed-income and private credit allocations

The January 2026 Deal Flow shows how family offices and institutional allocators co-invest in the same transactions — building overlap between pension and family capital that creates warm introduction paths.

Frequently asked questions

How large does my fund need to be to attract pension commitments? Most pension plans won't commit more than 5–10% of an individual fund. For a $25 million commitment, your fund should be at least $250M–$500M. Emerging manager programs at larger plans may commit $10M–$25M to funds as small as $100M–$200M.

Can I approach a pension fund directly without going through their consultant? Yes, but the consultant must independently evaluate you before the plan will commit. Building both relationships in parallel is the standard approach. Cold-contacting a CIO without knowing their consultant relationship signals a lack of institutional awareness.

How do I find out which consultant a pension fund uses? Board meeting minutes, CAFRs, and RFPs are typically public record for US state and local plans. They disclose consultant engagements. Altss tracks these relationships as part of its institutional LP coverage.

Are pension funds moving away from alternatives? No. State Street's August 2025 research confirms that while the pace of new alternatives allocations has plateaued, the allocation itself is stable at 23–32% for most large plans. Private credit is still growing. The question is not whether pensions will allocate to alternatives, but which strategies and which managers will capture that allocation.

How important are co-investment rights to pension funds? Large plans like CPPIB and Ontario Teachers' have built dedicated co-investment teams. Even mid-sized plans value co-investment rights as a way to increase alternatives exposure at lower fee cost. Offering co-investment capacity is a competitive advantage that pension allocators notice.

Altss is the OSINT-powered family office and institutional investors database that gives fund managers real-time coverage of 9,000+ family offices and institutional allocators — including pension funds, endowments, and sovereign wealth funds — with verified contacts refreshed on a ≤30-day cycle. Book a demo to see pension and institutional LP coverage.