I’ll just come right out and say it: We saw this coming.

CalPERS last month announced that it was exploring changes to its private equity program, including the removal of general partners and making private equity investments directly. As a $300 billion pension fund—among the 10 largest in the world—a move like this by CalPERS, the California Public Employees’ Retirement System, signals big changes coming to the market.

The fund maintains a $26.4 billion private equity portfolio, with $17.7 billion of that in PE funds, $3.8 billion in funds of funds, $2.9 billion in separate accounts and $1.8 billion in co-investments.

In the announcement, CalPERS CEO Theodore Eliopoulos said he was concerned with performance, as well as the fact that the small collection of private equity managers who do deliver top-level results are currently oversubscribed. The fund just isn’t seeing results that justify the fees it is paying to managers.

“It’s not a game of chicken,” Eliopoulos said, explaining that CalPERS isn’t out to attack its partners but instead wants to make its PE program as cost-effective as possible.

Again, we at iSelect saw this coming.

While venture as an asset class does outperform the market, to the tune of 27% annual returns, venture firms on the coasts have kept driving up fees in recent years without comparable gain in performance. In that kind of environment—paying rising fees for failing performance—moves like this are bound to happen and we expect to see more defections in the coming year.

At iSelect we are working to correct this imbalance by investing with strong venture firms located outside of Silicon Valley, simultaneously lowering fees while allowing asset managers to place money directly in well-positioned, high-growth companies.

Why? Because the world of private equity is changing, and CalPERS may only be the first domino to fall.

Read more about the CalPERS move