CalPERS to pursue disclosure strategy

The California-based pension fund is to vote on its future private equity fund disclosure strategy at a meeting of its investment committee next week.

( The California Public Employees Retirement System (CalPERS) has published a document on its web site stating what it thinks is a good model for disclosing private equity fund performance, including a web site dedicated to disclosing fund performance information.


The document is slated to be discussed at a meeting of CalPERS’ investment committee on Monday. The document spells out CalPERS’ plan of action after its December decision to disclose private equity fund performance data in order to settle a lawsuit with the San Jose Mercury News.


The document outlines the steps CalPERS intends to take in regards to private equity disclosure. CalPERS intends to set up a separate web site that links to its own site where private equity fund performance data, including internal rates of return, cash invested, and cash returned are displayed. The site will also have a list of general partners the pension is invested in with a description of strategy and links to those firms’ web sites. CalPERS also said it doesn’t intend to publish portfolio company information because it could be detrimental to the private equity fund’s performance.


“While the sharing of some portfolio company information might be appropriate in some instances, the Alternative Investment Management Staff believes the general partner is in the best position to make those determinations,” the document says. “Disclosure of this information puts public pension funds at a distinct disadvantage compared to private funds. It could directly impact the value of portfolio companies and, ultimately, the investment returns for CalPERS’ beneficiaries.”


CalPERS also has worked with the Canadian Pension Plan in regards to how it publishes its private equity fund performance and the pension will also work with various institutions like the Institutional Limited Partners Association (ILPA), The Association of Investment Management and Research (AIMR), and the European and British Venture Capital Associations to develop and adopt global valuation and reporting standards over the next year.


CalPERS began posting quarterly performance data on its private equity partnerships in October 2000. At the time, the fund listed 143 fund partnerships. The reports, which listed the internal rates of return (IRR) to December 2000 for every fund in which the pension invested since the private equity program began in 1990, were prepared by private equity advisor Hamilton Lane. The pension took the information off of its web site after GPs complained.