US, Europe pensions increase venture capital mandates

Pension funds across the US and Europe significantly raised their awarded mandates, or actual allocation, to venture capital in 2025.

In the US, pension funds issued a total venture capital mandate of $9.25 billion, the highest since 2022 and a 39% increase from $6.66 billion in 2024, according to data from With Intelligence.

As of Jan. 19, the collective market value of venture capital investments of the top 10 US pensions investing in the asset class was $30.37 billion. Leading the group was California Public Employees' Retirement System (CalPERS) with total venture capital investments valued at $8.73 billion.

CalPERS committed $30 million to Haun Ventures Management LP's Essential Innovation Partners LP fund in April 2025, With Intelligence data shows. The retirement system intends to make additional private equity investments, including venture capital, globally over the next 12 to 18 months.

Kaiser Permanente Pension Plan followed with venture capital investments valued at $4.78 billion. The Texas County & District Retirement System and the New York State Common Retirement Fund have investments valued at $3.29 billion and $3.08 billion, respectively.

Europe

European pension funds also increased their venture capital mandates. In 2025, mandates reached $485 million, up 64% from $296.1 million in 2024.

UK-based Border To Coast Pensions Partnership Ltd. led European pensions on venture capital investment value, at $287.8 million as of Jan. 19.

"VC is a quite new asset class for pension funds in the UK and in Europe. They have not historically been allocating a huge percentage of the portfolios to VC, but they've been increasing their allocations throughout the last couple or three years," said Bruna Bauer, head of research at Pensions for Purpose, a UK-based membership organization comprising institutional investors, managers and advisers.

Many pensions raising their venture allocation targets are doing so as part of a larger shift toward private equity, aiming for higher returns while accepting somewhat greater illiquidity and risk, according to Luke Riela, principal and research consultant for private markets at Meketa Investment Group, an institutional investment consulting firm.

The growing availability of venture capital coinvestment deals could also be drawing pensions to the asset class, Riela added.

Jittery tech sector

Recent AI product launches have raised concerns among technology investors that AI may significantly disrupt the software industry, which is where venture capital tends to invest.

Initially, AI was viewed as a catalyst for efficiency, cost reduction and rapid growth in technology businesses. However, over the past few months, investors have grown concerned that AI could render some companies obsolete within two to three years, said Ken Barry, head of Europe private equity at global law firm White & Case.

"AI is evolving at such a rapid rate that it's very difficult for investors at this point in time to forecast out over a three- to five-year time horizon, which is a classic private equity hold period," Barry said. "Our view is that there will continue to be use cases for a lot of these businesses that already exist and that, clearly, there will be some losers and there will be some winners," Barry said.

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Diversification benefit

Venture capital tends to target high risk, high reward startups, which would seem to run contrary to the strong emphasis that pension funds place on preservation of capital.

But large institutional investors will continue to diversify portfolios, comprising venture assets to later-stage assets, public and private market investments, "so that there isn't too much concentration risk in any one particular sector or any one particular life cycle of a sector," Barry said.

"There are lots of funds out there that are VC investors that specialize in looking for that unicorn asset. Certain investors have that appetite or they want to allocate a certain pool of their capital to those investments," Barry said.

With Intelligence is a part of S&P Global Market Intelligence.