US - CalPERS has been awarded US$117.7m settlement in a securities lawsuit brought against Time Warner - significantly lower than the $250m loss the fund said it had incurred as a result of the alleged accounting irregularities.
A CalPERS spokesman said the settlement was “approximately 17 times” more than it would have recovered if it remained in the class action suit.
CalPERS general council Peter Mixon said: “We are pleased with the settlement,” he said.
The lawsuit alleged AOL’s reported advertising revenue and income were overstated through the use of sham transactions and improper accounting practices before and after the merger with Time Warner.
There were federal investigations and the combined company later restated revenues on three occasions for a total of more than $1bn.
In other news, CalPERS and real estate investors Hines closed a second US$100m fund to invest in the Mexican real estate market.
The HCM Holdings II LP fund will have an eight-year term and $300m of capacity, including leverage, with discretion to invest in the development and acquisition of residential, retail, office and industrial properties.
CalPERS also announced its financial results for 2006 this week, with asset under management increasing $29.4bn to end the fiscal year ended Dec. 31 with $230.3bn.
The 15.4% return represented the fourth straight year the fund had achieved double digit returns.
The nation’s largest pension fund enjoyed particularly impressive returns from its real estate (27.6%), global equity (18.4%) portfolios, as well as its Alternative Investments Program (20.5%).
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