Advertisement

Lockyer asks for pension agent review

Share

California Treasurer Bill Lockyer on Tuesday asked the country’s biggest public pension fund to conduct an internal investigation into investments it made through so-called placement agents, who raise funds for outside asset managers.

The request to the California Public Employees’ Retirement System board is the latest fallout from investigations by New York Atty. Gen. Andrew Cuomo and the Securities and Exchange Commission of alleged pension-fund improprieties in New York state.

Lockyer, a CalPERS board member, said he wanted to ensure that third-party go-betweens did not engage in any inappropriate or unethical behavior aimed at winning investment deals for their clients with the giant pension funds.

Advertisement

“I hope such a review will help the board determine whether any improper conduct has occurred,” Lockyer wrote. “I am equally concerned, however, that we use a thorough review to provide good facts upon which to base the board’s decision to improve its placement agent policy.”

Lockyer’s request is expected to be taken up at a May 11 meeting of the CalPERS board’s investment committee.

The panel also is scheduled to discuss a proposal from CalPERS President Rob Feckner to begin disclosing the financial relationship between placement agents and outside investment managers.

Lockyer’s letter is not surprising in view of the attention that has surrounded the placement agent controversy, CalPERS spokeswoman Pat Macht said.

“Frequently, when these kind of issues pop, individual board members send letters” suggesting certain actions, she said.

Separately, the Los Angeles City Employees Retirement System board voted unanimously Tuesday to require that companies seeking contracts from the pension board identify whether they have hired a placement agent to help them obtain the contract.

Advertisement

Board members also asked the city attorney’s office to determine whether placement agents should be required to follow the city’s lobbying law, which requires lobbyists to name their clients and disclose their fees.

The Times reported last week that two appointees of Los Angeles Mayor Antonio Villaraigosa to the Los Angeles Fire and Police Pensions board had received letters from the SEC seeking documents regarding at least three financial companies that have come under scrutiny in connection with the New York pension investigation.

The federal agency also asked those members, Sean Harrigan and Elliott Broidy, to identify any sources of income they made from companies involved in the investment of pension fund assets.

Harrigan and Broidy could not be reached for comment.

--

marc.lifsher@latimes.com

Times staff writer David Zahniser in Los Angeles contributed to this report.

Advertisement