CalPERS Cooks the Books While Taking an Unnecessary Loss to Exit $6 Billion of Private Equity Positions

Link: https://www.nakedcapitalism.com/2022/07/calpers-cooks-the-books-while-taking-an-unnecessary-loss-to-exit-6-billion-of-private-equity-positions.html

Excerpt:

CalPERS is up to its old crooked, value-destroying ways. Its sale of $6 billion in private equity positions, at a big discount….because CalPERS was in a hurry despite no basis for urgency, shows yet again the sort of thing the giant fund routinely does that puts it at the very bottom of financial returns for major public pension funds.

Oh, and on top of that, CalPERS admitted to Bloomberg that it is lying in its financial reports for the fiscal year just ended this June 30 by not writing down these private equity assets. As former board member Margaret Brown stated:

In Dawm Lim’s Bloomberg story, Calpers Unloads Record $6 Billion of Private Equity at Discount, CalPERS admits to cooking the books. Not recognizing the sale (the loss in value) in the same fiscal year can only be to play shenanigans with the rate of return. So if, or more likely when, CalPERS again does badly in comparison to CalSTRS and similar funds, remember it would be even worse if CalPERS was accounting honestly.

Author(s): Yves Smith

Publication Date: 8 July 2022

Publication Site: naked capitalism

CalPERS Considering Selling Up to $6 Billion in Private Equity Stakes

Link: https://www.ai-cio.com/news/calpers-considering-selling-up-to-6-billion-in-private-equity-stakes/

Excerpt:

The California Public Employees’ Retirement System (CalPERS) has engaged financial services company Jefferies about the potential of selling up to $6 billion of its private equity stakes, according Buyouts magazine. This comes just after CalPERS announced it would be increasing the percentage of its portfolio allotted to private equity to 13% from 8% in November.  

CalPERS board member Margaret Brown told Secondaries Investor in November that the fund is considering investing in secondaries and divesting from some of its legacy private equity investments.

“We have some really old private equity that’s just sitting there and doing nothing,” she said.

Author(s): Anna Gordon

Publication Date: 13 Jan 2022

Publication Site: ai-CIO

CalPERS Rejects Reinvesting in Tobacco Again

Link: https://www.ai-cio.com/news/calpers-rejects-reinvesting-tobacco/

Excerpt:

Saying he wanted to boost portfolio returns, California Public Employees’ Retirement System (CalPERS) investment committee member Jason Perez made a second try at reversing the pension plan’s ban on tobacco stocks. But Perez’s proposal was overwhelmingly rejected Monday night.

At a meeting of the CalPERS investment committee, Perez’s new attempt—his first was in March 2019—attracted only one other vote on the 13-member panel, from Margaret Brown. The ban has been in place since 2001.

The $440 billion pension system would have earned an additional $3.6 billion in investment gains if it kept tobacco stocks in its portfolio between Jan. 1, 2001, and June 30, 2020, according to an analysis by Wilshire Associates, a CalPERS general investment consultant.

Author(s): Randy Diamond

Publication Date: 16 March 2021

Publication Site: ai-CIO