The Californian Public Employees’ Retirement System (CalPERS) could be the latest US public pension fund to disclose its investment performance data following the filing of a lawsuit demanding the publication of the pension fund’s private investment data.
The lawsuit has been initiated by a California-based newspaper, the San Jose Mercury News, which argues that California residents have the right to now details of the performance of the largest private equity investor in the United States. Of the fund’s $130bn under management, around $19bn is set aside for private equity investments.
The fund has previously published internal rate of return (IRR) data in 2001, but the paper alleges that “after the first quarter of 2001 – embarrassed at the devastating losses which shriveled its portfolios and shrunk the nest egg of thousands of its retirees CalPERS decided that it would no longer make those records available, in violation of the Public Records Act”. A legal spokesman for CalPERS has so far declined to comment.
CalPERS has long been one of the leading voices among limited partners calling for increased transparency and improved corporate governance standards in the private equity asset class. It announced last week that it is planning to increase its commitment to private equity investments from six to seven per cent of total assets.
As a public pension manager, CalPERS is subject to the US Freedom of Information Act [FoIA], obliging them to disclose information requested by a member of the public.
At the beginning of October, the University of Texas Investment Management Company’s (UTIMCO) published investment performance data following a report in the Houston Chronicle which claimed that UTIMCO had reneged on an agreement announced in 1999 to publicly disclose returns on the funds.
UTIMCO’s decision to disclose was contested by private equity funds which claimed that publication would contravene confidentiality rules established at the time of original agreements. Firms also argued that the data was not a reliable gauge of fund performance.