CalPERS to Buy Yucaipa Stake

The California Public Employees’ Retirement System, the largest public employee pension fund, plans to spend as much as $560 million to boost its private-equity investments through an alliance with Yucaipa Cos.

CalPERS plans to buy a stake in Yucaipa for $35 million and has an option to invest as much as $275 million in the firm. Los Angeles-based Yucaipa is led by managing partner Ron Burkle.

The pension fund pledged $200 million to Yucaipa in May. CalPERS, which has assets under management of $147 billion, said today it plans to commit $250 million to alternative investment funds from Yucaipa.

Yucaipa has made 21 investments worth more than $14.6 billion since 1986, earning a “gross internal rate of return” of 45.1%, the company said.