US pension giant Calpers retreats from Big Tech as AI rally falters

{"text":[[{"start":11.44,"text":"California’s $640bn pension giant is pivoting away from big US tech companies and boosting its exposure to private equity, underscoring concerns that the AI rally that has powered Wall Street to record peaks is running out of steam."}],[{"start":23.8,"text":"“We have traded large exposure to seven companies for several hundred companies,” Anton Orlich, Calpers’ deputy chief investment officer, told the FT. “We are diversifying our equity risk. We are less concentrated.”"}],[{"start":37.64,"text":"His remarks came after Calpers, the US’s largest retirement fund for government workers, repositioned its portfolio in the first half of 2026, reducing the combined number of shares it directly held in the Magnificent 7 stocks — Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta and Tesla — by 26 per cent, according to FT calculations based on the fund’s regulatory filings."}],[{"start":61.48,"text":"Calpers’ shift highlights the growing angst among many investors about the sustainability of a rally in tech stocks fuelled by massive spending on data centres and chips at the heart of the AI boom."}],[{"start":73.12,"text":"Meta’s disclosure this week that it intends to spend “hundreds of billions of dollars” in coming years to finance its AI plans triggered a powerful sell-off in tech stocks on Thursday, which has left the Nasdaq 100 7.7 per cent below the all-time high it reached earlier in October."}],[{"start":90.68,"text":"Calpers’ pivot comes amid a several-year bull market in US stocks led by technology giants. Meanwhile, private equity funds, once a major driver of institutional returns, have struggled to sell or list companies in their portfolios."}],[{"start":105.36,"text":"The blue-chip S&P 500 index gained about 65 per cent including dividends in the three years to March 2026, compared with a 24 per cent return for a US private equity index compiled by Cambridge Associates over the same period."}],[{"start":null,"text":"

"}],[{"start":121.04,"text":"“The valuations are higher in public equity markets,” Orlich said. “There you are really concentrated in a few names and I can see a world where those stocks underperform on a relative basis.”"}],[{"start":131.76,"text":"He said private companies were priced at more alluring levels than listed stocks, something he called an “arbitrage” opportunity that could help insulate Calpers in an eventual downturn in public markets."}],[{"start":142.64,"text":"Investments in venture capital and fast-growing established private companies have accounted for a “disproportionate” share of Calpers’ new commitments since it overhauled its investment strategy in 2022, Orlich said."}],[{"start":156.4,"text":"While the market for initial public offerings has been open for a handful of blockbuster listings, Orlich said Calpers could exit many of its venture capital and growth equity holdings through sales to strategic buyers instead."}],[{"start":168.12,"text":"Still, analysts have questioned whether Calpers’ push into private equity could pose long-term risks, particularly as soaring valuations of AI start-ups such as OpenAI and Anthropic raise concerns about the sustainability of returns from venture capital and growth equity."}],[{"start":185.4,"text":"Roger Vincent, founder of Summation Capital and formerly head of private equity at Cornell University’s endowment, said he is sceptical about the rationale for shifting from publicly traded stocks into venture capital and growth equity, where valuations have surged."}],[{"start":201.68,"text":"“There may be nothing more obvious in the world right now than AI will completely transform society. There may be nothing harder in the world than successfully making money in a hype cycle,” he said."}],[{"start":217.44,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1792745418_9595.mp3"}