US - CalPERS will disclose its profits and losses and the amount of fees paid on its private equity investments - a decision that settled a lawsuit brought by a local public interest pressure group.
Under the terms of an agreement between the US$177bn CalPERS and the California First Amendment Coalition (CFAC), the pension fund will provide a customised spreadsheet covering the gains and losses and management fees of each private equity partnership for the years 1999-2003.
Information for years 2004 and 2005 will be made available in the future.
“This innovative solution - to develop new documents with the bottom line information - enables us to provide important information to the public and still protect, as prescribed under the exemption to state disclosure laws, the kind of information that absolutely must be shielded to meet the public interest in obtaining high rates of return from a diversified public pension asset pool,” Peter Mixon (pictured), general counsel for CalPERS said in a statement.
CFAC filed suit against the fund in state court in September, alleging that CalPERS’s practice of only disclosing the aggregate amount of fees paid to private equity firms violated state public record law.
The fund countered that such information is confidential under the terms of contracts they sign with private equity partnerships and that they would be shut out of investment funds if they were forced to reveal specific fees, carried interest and profit splits with their partnerships.
CalPERS has invested US$21.1bn in private equity and committed US$2bn in hedge funds, with profits of more than US$6bn since 1990 in its private equity program. In 2003, the fund paid management fees and costs of US$202m to private equity fund managers.
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