US - The California Public Employees' Retirement System (CalPERS) has thrown its weight behind twice the amount of shareholder proposals in the fiscal year 2006-7 than the previous one.
Of the 33 proposals filed by CalPERS, several were withdrawn, mainly due to companies backing down and agreeing to new corporate governance practices.
Charles Valdes, chair of the investment committee at CalPERS, commented: “Public pension plans are more active than ever in filing proposals, campaigning for them, and scrutinising directors for poor governance practices.”
The fund said it had received an average of 60% in investor support for the first six proposals it tabled in the first half of 2007.
“These high support levels show that our shareowner activist campaigns are increasingly effective,” said Valdes. He added: “This trend will continue as we seek better alignment with boards to implement corporate governance practices that will pay off in higher investment returns.”
In a separate development, CalPERS announced it had selected four firms to seek out emerging fund of fund managers with long-only public equity strategies.
The managers, which would be awarded contracts from US$100m to $150m should have less than $2bn in assets, and will be reviewed annually.
Valdes said: “This program will complement others in our global equity portfolio, increase overall investment diversity, and build bridges to smaller firms that we wouldn’t normally be able to reach.”
CalPERS said it had already allocated $2.5m to its two manager development programmes.
Rob Feckner, president of the CalPERS board, Rob Feckner said: “Allocations to managers will grow over time, depending on market opportunities and the success of the fund-of-funds firms."
Feckner added: “Fund-of-funds managers will give us access to a large number of emerging firms.”
In addition to the manager development programmes, CalPERS quoted reports showing it had added value at less cost than other large US pension funds, over the previous five years to the end of 2006.
The report by Cost Effectiveness Measurement Inc, (CEM) showed by taking advantage of market opportunities over this period, it had added $1.9bn more a year rather than purely following its asset allocation strategy.
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