CalPERS to Retain Philippines Investments

As expected, the California Public Employees’ Retirement System said Monday it won’t sell off its investments in the Philippines, after the giant pension fund acknowledged that an initial decision to sell was tied to erroneous information from a consultant.

The fund’s board changed its mind after an April 19 meeting in Washington in which Philippine finance officials pointed out that consultant Wilshire Associates had incorrectly found the Philippines market used a manual system to settle stock trades, not the more efficient computer system used in the U.S. and many countries.

“It became clear that they were not given credit for their level of proficiency” in stock clearance, said Mark Anson, chief investment officer for $151-billion CalPERS.

The fund’s staff last month said it would recommend that CalPERS’ trustees rescind the sale decision. The vote came Monday.

CalPERS this year tightened standards for investing in emerging markets. Those standards are based on technical issues, such as liquidity, and on human rights concerns.

The fund’s initial decision to exit the Philippines was a blow to the nation’s image, and could have influenced other U.S. investors.