California Public Employees' Retirement System is aiming to reduce its VC investments to 1% of its total portfolio, down from a current 5% and 7% in 2012.

Venture capital has been the worst-performing asset over the last five years for the US’s California Public Employees’ Retirement System (Calpers).

VC now makes up 5% of its $303bn in assets, down from 7% in 2012. The US’s largest pension fund wants its VC allocation to be only 1% of its total investment portfolio, Bloomberg reports.

What this means in practice is Calpers only committed to one VC and private equity fund, $100m to Insight Venture Partners’ $3.3bn ninth fund, last year. Given its $1.8bn of commitments to primarily private equity funds, Calpers’ strategy has been to invest more with fewer managers, driven by its size and returns.

Calpers, which is responsible for the retirement savings of more than 1.7 million government employee members, sold assets in 46 funds totalling more than $2bn during the first half of the year, though the report compiled by the Pension Consulting Alliance didn’t specify the names of the funds.

“Returns for VC holdings at the nation’s largest public pension fund were 7% over the last five years and 5.6% over the last decade, according to a presentation prepared for the board,” Bloomberg said from an investment committee report by Calpers.

The investments lagged behind all other private equity assets for Calpers, partly due to “modestly decreased” activity in venture-backed initial public offerings, the presentation said.

Since its inception in 1990 to December 31, 2015, the private equity program has generated $32.8bn in profits for Calpers, with a net internal rate of return of 10.8% and a net multiple of 1.4 times.

In March, a bill was introduced in the California Assembly aims to require the state’s public pension funds to track details of the fees they pay for private equity investments.