September 02, 2025
Pension funds sit at the intersection of Main Street and Wall Street, bolstering retirement security and fueling private markets via the GP–LP alliance. That convergence is under pressure: reforms are redefining funding models, extending retirement ages, and demanding stronger governance.
Nonetheless, pensions remain cornerstone allocators to private equity and private credit, rewarding managers who can combine liquidity awareness, transparency, and operational rigor with differentiated performance. Today, we will be discussing the pension allocation shifts underway and how GPs and LPs alike can capitalize on these developments.
In this article, we’ll break down the state and federal policy changes reshaping pension allocations, share exclusive dakota data on where capital is flowing, and outline actionable steps GPs can take to adapt. By the end, you’ll have a clearer understanding of the structural forces driving pension commitments and how to respond with liquidity-aware strategies, governance-ready operations, and differentiated positioning.
States are tightening funding rules and introducing oversight that slows commitments or forces pacing resets.
Federal reforms are raising governance expectations with tougher funding thresholds and expanded reporting mandates.
These pressures make governance strength and liquidity management key differentiators for GPs.
Despite reforms, pensions remain highly active in private markets. Dakota’s Q2 2025 Institutional Allocations Report shows:
Public pensions committed $64.3 billion to private markets, a 22% increase over Q1.
Private equity led with $26.3 billion, underscoring its role as the cornerstone alternative.
Private credit followed with $14.8 billion, highlighting its rise as a fixed-income replacement.
Allocations also moved into infrastructure, real assets, and secondaries, reflecting demand for resilience and “engineered liquidity.”
Private equity remains the cornerstone allocation; private credit is the fast-rising complement.
Capital is concentrating in strategies that offer yield, resilience, and liquidity.
Offer Liquidity-Aware Structures
Evergreen, semi-liquid, and credit-enhanced funds meet pacing and cash flow needs.
Demonstrate Governance & Cost Efficiency
Clear fees, standardized reporting, and compliance-ready frameworks align with reform-driven oversight.
Differentiate Strategically
Highlight sourcing advantages, operational alpha, or thematic expertise (e.g., infrastructure, climate resilience).
Be Deployment-Ready
Anticipate quarterly allocation waves and position with co-investments, continuation vehicles, and flexible structures.
Marketplace Reach: Trusted by 1,300+ firms, enabling tens of billions in fundraising.
Allocation Intelligence: Quarterly reports reveal who is committing, how much, and into which strategies.
Real-Time Research: Continuous tracking of pacing, themes, and manager selection trends.
Scalable Infrastructure: Secure, cloud-based systems ensure data integrity for large LP datasets.
Reforms are reimagining pensions, but allocations to private equity and private credit are still expanding. GPs who deliver liquidity-savvy structures, transparent operations, and differentiated strategies will flourish.
dakota marketplace equips GPs and LPs with the necessary data, insights, and infrastructure to anticipate shifts, broaden outreach, and build lasting trust in America’s ever changing capital markets and investment landscape.
For more insight into where allocations are moving with public pensions, book a demo of dakota marketplace.
