The California Public Employees’ Retirement System (CalPERS) is chasing the remaining six percent of its general partners who have so far declined to provide information on carried interest, the pension fund said in a statement.
The fund has also requested all its current GPs provide it with information on partner-level carried interest deducted from gross returns since inception.
Since the beginning of 2015, 94 percent of CalPERS GPs have provided the fund with carried interest information and in the autumn, the fund will begin publishing the data for the fiscal year that ends in June.
CalPERS, which manages about $303 billion of assets on behalf of state employees, invests in more than 700 private equity funds. The statement follows media reports that it was unable to track carried interest.
“Historically, fees and carried interest in the private equity industry have not been consistently reported by private equity managers,” CalPERS chief investment officer Ted Eliopoulos said in the statement. “A complex portfolio like CalPERS with a wide variety of economic terms and agreements that span a decade or more requires a comprehensive solution for accounting, tracking, and reporting of fees and carried interest.”
CalPERS has developed the Private Equity Accounting & Reporting Solution (PEARS) to resolve the shortcomings of its legacy PE accounting system, described in the statement as unable to “accurately and comprehensively capture, calculate and aggregate” carried interest. It has been able to identify total management fees paid to GPs.
It has been seeking to improve tracking and reporting of private equity fees, carried interest and other fund and portfolio level data since 2011. Since 2012, CalPERS has collected data on capital calls and distributions using reporting templates formulated by the International Limited Partners Association (ILPA).
The statement on carried interest reporting follows CalPERS’ announcement in an investor call in early June that it intends to half its number of external managers, including its allocation to private equity, to reduce fees, as reported by Private Equity International.