CalPERS wins fee break from CIM Group

The $218 billion pension giant won a fee break from CIM Group, a real estate manager with ties to Alfred Villalobos.

CIM Group has agreed to cut its fees paid by the California Public Employees’ Retirement System by $50 million over five years, confirmed a spokesperson for CalPERS. CIM Group also agreed to stop using placement agents when trying to win business from the $218 billion pension fund.

CalPERS has invested more than $600 million in three real estate funds with CIM Group, according to pension documents. CalPERS also made a $200 million commitment to the CIM Infrastructure Fund in August 2007.

CIM Group, a California-based real estate firm has a history with former CalPERS board member Alfred Villalobos who is embroiled in a bribery scandal.

According to a report in the Sacramento Bee, CIM Group hired Villalobos 10 years ago to pitch investments to CalPERS, paying him $9.6 million for his work.

Villalobos, who earned more than $50 million from placing CalPERS capital with investment manager clients, was sued by California Attorney General Jerry Brown in May, accusing him of bribing three former officials with the pension funds.

Brown filed a $95 million civil suit against Villalobos for alleged fraud in his dealings with the pension. Brown is also suing ARVCO and former CalPERS CEO Federico Buenrostro. Villalobos has denied wrong-doing and said in bankruptcy court he planned to sue CalPERS for $10 million for making false statements about his dealings with the pension.

Aside from the fee cut, CIM said it would no longer hire placement agents when calling on CalPERS.

A CIM spokesperson did not return calls by press time.

CIM Group is the latest in a string of firms cutting fees for CalPERS investments.

In June, Ares Management agreed to cut $10 million in fees over five years for CalPERS and Relational Investors agreed to a $30 million fee cut over five years. In April, Apollo Management okayed a $125 million cut over five years in fees in accounts the firm manages exclusively for CalPERS.