CalPERS’ New World View Hits Home in Asia

The California Public Employees’ Retirement System said it will sell off its assets in the Philippines, Thailand, Indonesia and Malaysia, saying those countries don’t meet tough new standards--that now include human rights--for emerging-markets investments.

The decision marks the first time that CalPERS, the nation’s largest public pension fund, has applied criteria linking investment decisions in emerging markets to social issues, Brad Pacheco, a spokesman for the $150-billion fund, said Wednesday.

The measure could spur pension plans across the United States to consider human rights when investing, some analysts said.

CalPERS has long conducted regular reviews to assess its investments in developing countries. In the past, however, the main factors were financial ones, such as a country’s market liquidity or legal protections for investors.

Now, CalPERS will give equal weight to factors such as political stability and protection of civil liberties as a way to signal to repressive regimes they need to clean up their act if they want to see foreign investment, Pacheco said.

According to a report submitted to CalPERS by Wilshire Associates, the pension fund’s consultant, the Philippines appeared to miss CalPERS’ guidelines primarily for financial reasons, while Malaysia and Indonesia did poorly on human-rights considerations. Thailand received a more mixed score, but still failed to make the grade.

Pacheco said he did not know the current value of CalPERS assets in the four Southeast Asian countries, but added that they would be slowly divested over an unspecified period of time.

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Economist Yardeni

Headed for Prudential

Edward Yardeni, one of Wall Street’s most plain-spoken economists, is leaving brokerage Deutsche Banc Alex. Brown to become chief investment strategist at Prudential Securities, a firm he left a decade ago.

Yardeni, 51, will replace Greg Smith, who resigned the post at Prudential late last year.

As chief strategist, Yardeni will be responsible for Prudential’s overall investment strategy, including recommended asset allocations for clients and portfolio strategy, the company said.

Yardeni has been widely quoted in the media on economic and market issues. His written commentaries are down-to-earth in style. He recently wrote of the Enron Corp. debacle: “It is too soon to say whether Enron’s managers were scoundrels or stupid. It is clear that the company’s shareholders would have been better served by someone like Chauncey Gardner, the simple-minded honest character played by Peter Sellers in ‘Being There.’”

Yardeni, who has a doctorate in economics and a master’s in international relations from Yale University, was chief economist at Prudential for eight years before leaving in 1991.

Deutsche Banc said it expects to name Yardeni’s successor on or before April 22, when he starts his job at Prudential.

Over the last year, Prudential Securities--a unit of Prudential Financial--has tried to cultivate an image as a brokerage more in tune with individual investors’ needs than its rivals.

For example, the firm has argued that because it does little investment banking, its stock analysts are free of typical brokerage conflict-of-interest risks.

Yardeni is relatively upbeat on the stock market. He expects the Dow Jones industrial average to end the year at 11,500, which would be a gain of 16% from Wednesday’s close.

Smith said he left Prudential after the firm declined his request to manage money.

Times Staff, Bloomberg News

Briefly

LIN TV Corp., a major owner of U.S. TV stations, filed Wednesday for a $300-million initial public stock offering. Providence, R.I.-based LIN owns 26 network affiliated and independent stations.

LIN was taken over in a $2-billion buyout by the closely held investment firm Hicks, Muse, Tate & Furst in March 1998.

With a new round of consolidation expected in the media business in the wake of a court ruling this week favoring large media companies, some analysts questioned whether LIN might be bought out before the IPO.

The company didn’t indicate how many shares it expects to sell.

Bloomberg News