CalPERS’ Board of Administration voted yesterday to publish on a quarterly basis:
- internal rate of returns (IRR’s) for its funds and fund of funds
- amounts of cash invested and
- profits realized from that cash invested.
In addition, CalPERS said it intends to work closely with the private equity industry to improve the quality of public information related to IRR’s and portfolio company valuations.
However, the $133 billion fund also decided that revealing the identities and performance of private companies which make up investments of each fund could be problematic. Consequently, under the new policy, that data will continue to be withheld publicly because its release could harm CalPERS’ ability to invest in the funds, according to a press release.
“Consistent with CalPERS’ fiduciary duty we believe that this type of disclosure would cause economic harm to CalPERS, the companies, and the fund managers,” said Mark Anson, Chief Investment Officer for the pension fund. “There is a consensus in the industry that providing transparency of individual fund performance would not be detrimental to investment results, but there will be material negative impact if we disclosed portfolio company data,” Anson added.
That stance largely mirrors the stance the fund took last December as part of a settlement with the San Jose Mercury News, which had sued CalPERS for access to performance information on the fund’s private investments, claiming the state’s taxpayers and public employees had a right to know (see CalPERS to Go Public With Private Equity Info ). Although previously available from CalPERS, the fund refused the request under the state’s Public Records Act, saying that such data now would “offend the firms it invests in”, and therefore hurt CalPERS’ investor status.
Private company information typically includes such sensitive data as proprietary technologies, patent secrets, competitive strategies, financing alternatives, company valuations, cash positions, management changes, and buyout targets.
CalPERS expects to release its private equity performance data in an expanded format on its web site by April 30. According to a press release, the site will also serve as an educational tool about the private equity industry and will include profiles and links on the general partners that CalPERS invests with.