CFAC v. CalPERS
CFAC successfully sued CALPERS, California’s public employee retirement system, to force it to disclose the management fees it pays to venture capital, private equity, and hedge funds in which CALPERS invests. Because of its huge size, CALPERS is the de facto standard-setter for the pension industry nationally. When CALPERS settled CFAC’s suit, agreeing to most of the fee disclosures CFAC had sought, public pension plans across the country followed suit.
CalPERS settles suit filed by CFAC. Pension fund for first time disclosses fess and profits on “private equity” investments. The California Public Employees’ Retirement System (CalPERS) publicly disclosed Monday, for the first time, the management fees it pays to individual venture capital, hedge, and other private equity funds in which CalPERS invests. The disclosure was hailed as a major victory for open government by the California First Amendment Coalition (CFAC), which had sued CalPERS to get the documents.
The documents reveal millions of dollars in management fees paid to venture funds which, according to press reports, are affiliated with individuals who made campaign contributions to CalPERS board members.
San Jose Mercury News
CalPERS settles lawsuit over disclosure of fund fees, information released about investment charges
California’s giant pension fund, CalPERS, on Tuesday announced a settlement to the case filed against it by the California First Amendment Coalition, agreeing to disclose information about the money it pays to the managers of its private investments. According to the settlement, which was expected, CalPERS has disclosed the management fees it pays to individual venture capital, hedge and other private equity funds in which it invests. The information covers 2001 through 2003, and CalPERS will disclose information for 2004 and 2005 as it becomes available. The settlement has revealed that CalPERS pays just over $200 million a year in management fees to 416 private equity funds in which it has invested $13.5 billion and plans to invest $21.1 billion. The First Amendment Coalition argues that CalPERS is paying too much in fees, which CalPERS disputes.
Los Angeles Times
CalPERS discloses private equity fees to settle a watchdog suit, the fund agrees to reveal what it pays to have its money managed
A watchdog group settled a lawsuit with the California Public Employees’ Retirement System on Tuesday, forcing the giant pension fund to disclose the fees it pays to have its money managed. The settlement was hailed as a victory by open-government advocates and may give ammunition to critics who contend that CalPERS is fraught with conflicts of interest. Fee details released Tuesday confirmed reports that CalPERS had made payments to partnerships whose principals have contributed to the political campaigns of two CalPERS board members: state Treasurer Phil Angelides and Controller Steve Westly. CalPERS, a $177-billion fund, has made an international name for itself by demanding greater corporate responsibility and transparency from the companies in which it invests.
The Wall Street Journal
Calpers to Disclose Fees Paid, Returns Made on Its Investments
California public retirees for the first time will be able to see how much the nation’s largest pension fund is paying in fees to individual private-equity funds and how much profit or loss each of those funds is generating annually, under terms of a legal settlement reached yesterday. In response to a lawsuit filed by a First Amendment rights group, the California Public Employees’ Retirement System, or Calpers, agreed to disclose how much it has paid annually from 2001 to 2005 in fees and costs to private-equity firms. Under the settlement, Calpers is preparing spreadsheets that reflect the annual amounts of the profit that it has received from each fund during 1999-2005. The settlement is the latest win for open-records advocates who are seeking greater disclosure of performance and investment data from private-equity firms, which are resisting the push.
Los Angeles Times
Fees to hedge funds and venture capital firms should be made public, a media group says
A group representing California news organizations sued the California Public Employees’ Retirement System on Tuesday, demanding that the giant pension fund reveal the money management fees it pays to individual venture capital firms and hedge funds. The suit places CalPERS on the other side of the table on the hot-button issue of disclosure: The $166-billion fund has been among the most vocal big investors nationwide in agitating for companies to be more forthcoming in their financial accounting and how their boards make decisions. Despite that policy, CalPERS in June refused a request by the California First Amendment Coalition that it itemize what it pays venture capital firms and hedge funds that manage nearly $9 billion in CalPERS assets. In part, the fund cited competitive issues, saying that some investment managers might decline to do business with CalPERS if their fees were made public.
The Wall Street Journal
Calpers Is Sued To Disclose Fees It Pays to Firms
A new round in the so-called transparency wars kicked off yesterday. An open-government advocacy group filed a lawsuit against the California Public Employees’ Retirement System asking that the pension fund disclose the management fees it is charged by private-equity firms that invest on its behalf. The lawsuit, filed in Superior Court in San Francisco, follows a freedom-of-information request that the group filed in May, asking for the data. Calpers refused the request, citing confidentiality agreements, according to the suit. “Calpers spends $500 million in management fees for alternative investments like venture-capital funds,” says Peter Scheer, executive director of the California First Amendment Coalition, a nonprofit group that filed the suit. “That is a great deal of money by any measure.” The pension fund’s constituents, he maintains, “can’t tell whether Calpers is getting a good deal, a bad deal, or whether they are paying too much.”