Administration June 12, 2003

CalPERS to Provide Private Equity Info

December 18, 2002 (PLANSPONSOR.com) - Accepting a staff recommendation, the California Public Employees' Retirement System's (CalPERS) board is considering opening up on its private equity investments, according to a Reuters report.
Reported by

The CalPERS’ board has asked its staff to draw up a proposal on private equity disclosure for its March meeting that adequately balances its fiduciary role and responsibility as a public agency, according to CalPERS spokesman Brad Pacheco.

This comes as a policy reversal for the $128 billion pension fund, which had previously said private equity investments are a trade secret and disclosure on them would hurt investment partnerships.  

Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.

Venture capitalists, who normally work privately with investors, want to keep their fees and performance of their portfolio companies out of public view for competitive reasons.

However, CalPERS and California Treasurer Phil Angelides, a member of CalPERS ‘ investment committee, are now pushing for greater market transparency in all state pension fund investments.  

Recently, Angelides released his ” Power of the Purse ” corporate governance doctrine, calling on investors to make investment decisions based on such things as executive accountability and ethical conduct. In addition, CalPERS adopted   investor protection principles   in August, requiring money managers to disclose client relationships, portfolio manager compensation and commission payments on CalPERS-related deals.

“I think there is a very strong argument for the fund-level data to be disclosed,” Angelides told the San Jose Mercury News.

But Angelides added that information deemed a “trade secret” would still be held confidential.

Disclosure Suits

Previous refusals by CalPERS to release private equity investment returns led to a lawsuit filed by the San Jose Mercury News to open up data on returns of CalPERS $7 billion private equity portfolio.

CalPERS lost  the suit last month  when a California judge ordered it to disclose returns on its investments, unless trade secrets could be proven.  

TheCalifornia State Teachers’ Retirement Fund (CalSTRS) has also recently decided to  release the performance results  of the venture capital and other private funds in which it invests, under pressure by the Mercury News to provide such information.

«