Since he was hired four years ago, University of California's Chief Investment Officer Jagdeep Singh Bachher has been giving the $66.6 billion pension fund and $11.5 billion endowment a makeover — and he's not done yet.

Mr. Bachher calls the approach the "UC Investments Way." What remains to be seen is whether the new strategy, including seeding five new investment funds, will produce good risk-adjusted returns in what has been a low-growth environment.

Mr. Bachher and his investment staff plan to continue beefing up the pension fund and endowment's public equity portfolios' passive strategies, add a quantitative strategy and, possibly, market-neutral holdings.

The investment staff also plans to increase the size of co-investments, particularly in private equity and real estate, and steer the portfolios away from fossil fuel exposure, aiming for a carbon-neutral real asset portfolio by reducing oil and gas assets and increasing infrastructure investment.

Staff members also plan to increase the average commitment size to real estate and real asset managers.

Staff members are in the midst of a transaction that would increase the real estate and real asset portfolios dramatically. They also are about to announce a new direct venture capital investment based on a University of California professor's innovation, Mr. Bachher said in an interview. He would not elaborate.

"We are at the first stages of what we are doing here," said Mr. Bachher. "It will take another decade or so" to judge the success of the changes.

During a March 13 meeting of the UC Regents investment subcommittee, Mr. Bachher emphasized the growth in total assets in the four years since he joined. The investment office managed a total of $118 billion as of Dec. 31, which also includes short-term portfolios and a captive insurance company formed in 2012, up from $88.5 billion in 2014.

The increases were due to the growing stock market around the world, he said.

Mr. Bachher warned at the meeting that the high returns the endowment and pension plans have enjoyed are "not sustainable and will go down."

Still, neither the endowment nor the pension fund has outperformed its benchmarks by wide margins. The endowment underperformed its custom benchmark by 1 percentage point, notching a gain of 14.6% gross of fees in the year ended Dec. 31, while the pension fund outperformed its benchmark by 50 basis points to 16.7% for the same period.

Both plans edged above their benchmarks for the 10-year period, by 0.6 of a percentage point each, to 5.8% for the endowment and 5.6% for the pension plan.

The University of California's pension plan fared better against its peers than the endowment for the year ended Dec. 31. The Wilshire Trust Universe Comparison Service universe returned a median 14.72% for plans of all types. Public pension plans earned 15.17% for the year, while foundations and endowments returned 14.72%.

As part of the revamp, the pension plan and endowment investment staff slowly have rolled out five new platforms, some of which are still evolving, over the past four years: Congruent Ventures, UC RNT Associates, Aligned Intermediary, Risk 3.0 and UC Ventures.

The University of California, in early 2017, committed $50 million to Congruent Ventures, a new energy seed-stage venture capital fund co-founded by Joshua Posamentier, who had been a principal at venture capital firm Prelude Ventures, and Abe Yokell, a former partner at Rockport Capital.

UC RNT Associates is a joint venture between the university and RNT Associates, the family office of Indian entrepreneur Ratan Tata. The university's investment office had first hired Mr. Tata in 2015 as a senior adviser to the CIO. At the time, the plan was to invest, over three years, up to an additional $1 billion in public markets and private assets in Asia, including India. So far, the university has paid $1.5 million in management fees and $442,417 in partnership expenses to RNT Associates through June 30, according to the university's private equity fee disclosure. The investment has produced a net internal rate of return of -6.88%.