Jan. 9 (Bloomberg) -- The California Public Employees' Retirement System, the largest U.S. public pension plan, agreed to buy 9.9 percent of Silver Lake Partners, the biggest private- equity firm specializing in technology companies, a person with knowledge of the decision said.

An announcement may come as soon as today, said the person, who declined to be named because the talks are secret. The stake is worth about $275 million, valuing Menlo Park, California-based Silver Lake at $2.75 billion, the New York Times reported earlier today, citing unidentified people briefed on the deal.

Calpers, which covers the benefits of more than 1.5 million Californian state and local government employees, has more than 400 private equity investments. Sacramento, California-based Calpers plans to reduce that number by concentrating assets in fewer fund managers.

``They're looking to have fewer relationships and to do that, they need to take substantial positions in these funds,'' said Nick Arnott, a managing director at London-based research firm Private Equity Intelligence Ltd. Calpers has committed $400 million to Silver Lake's planned $8 billion pool, more than three times what it invested in the firm's 2004 fund.

Calpers also owns 10 percent of Apollo Management LP, the leveraged-buyout firm run by Leon Black, and 5 percent of Washington-based Carlyle Group. The pension plan is investing $1 billion in Carlyle's latest U.S. LBO fund, more than three times what it invested in the firm's 2005 pool.

SunGard to Nasdaq

Calpers spokesman Brad Pacheco declined to comment on the report in the New York Times. Matthew Benson, a spokesman for Silver Lake in San Francisco, didn't immediately return a message left on his cell phone after business hours.

Started in 1999 by Jim Davidson, Glenn Hutchins, David Roux and Roger McNamee, Silver Lake's holdings range from software company SunGard Data Systems Inc. to Freescale Semiconductor Inc. The firm also has invested in Nasdaq Stock Market Inc. and Seagate Technology.

Calpers Chief Investment Officer Russell Read said last month that the pension plan will shift an extra $10.4 billion into alternative investments such as private equity and hedge funds. Silver Lake's 1999 fund has turned Calpers's $73 million commitment into $132 million of cash, and stakes in companies worth about $23 million, according to the Calpers Web site.

Silver Lake rival Carlyle, which manages $75 billion of funds, was valued at $20 billion when it sold a stake to the government of Abu Dhabi in September. Blackstone Group LP has dropped 41 percent since its initial public offering in June, valuing the New York-based manager of the world's biggest LBO fund at $19.5 billion.

To contact the reporter on this story: Edward Evans in London at at eevans3@bloomberg.net

Last Updated: January 9, 2008 04:31 EST