CalPERS Releases Placement Agent Disclosures
January 14, 2010 (PLANSPONSOR.com) – The California Public Employees’ Retirement System (CalPERS) on Thursday released documents showing that private placement agents received more than $125 million to help investment managers win business from the giant pension fund.
A news release said the documents CalPERS released represented more than 600 disclosures as part of a new policy requiring external managers seeking fund business to reveal their use of an agent and the fees paid to the agent. The CalPERS policy mandates such disclosure for new investments and changes to investments occurring after May 2009.
“In light of recent questions raised about placement agents, we are working aggressively to take measures to provide transparency, adopt thoughtful reforms, and restore trust in our system,” said Anne Stausboll, CalPERS Chief Executive Officer, in the news release. “Gathering information is not enough. We remain firmly committed to pursuing a full and fair examination that the special review will provide, and to backing legislation that would remove contingent fee arrangements and require placement agents to comply with the same rules as lobbyists.”
Last month, the CalPERS Board voted to sponsor new state legislation that would require placement agents to register as lobbyists; prohibit compensation paid contingent upon defeat, enactment, or the outcome of any proposed investment action; significantly limit gifts to individuals; and prohibit campaign contributions (see CalPERS Votes to Support Requiring Placement Agents to Register as Lobbyists).
The fund said more than 90% of CalPERS external managers asked to submit data agreed to do so.
A Los Angeles Times news account said a company owned by former CalPERS board member Alfred J.R. Villalobos, ARVCO, received $58.9 million in fees, more fees than any other placement agency (see CalPERS Arvco Financial Payments Higher than Reported).