CalPERS to Reveal Investment Returns

Pension giant CalPERS said Monday that it would release returns of private equity funds in which it invests through outside managers as part of a new disclosure policy it hopes to make an industry standard.

The California Public Employees’ Retirement System, the largest U.S. pension fund with $20 billion of its $134.1 billion of assets committed to private equity, said it would publish quarterly the internal rates of return for its funds, as well as underlying funds invested in through outside managers such as Grove Street Advisors.

CalPERS also plans to work with others to improve disclosures on returns and the method by which private equity fund managers value the companies in which they invest.

The move comes in the wake of an October lawsuit to force such disclosures after corporate accounting scandals and investment losses by the system. CalPERS settled the lawsuit in December and agreed to release investment returns for each of its private equity funds, including the date of the investment and the profits made.

“We feel this could be a good standard, and we urge other pension funds and organizations to consider this as a standard,” spokesman Brad Pacheco said.

The board also approved increasing its investment in CIM Group, an urban real estate fund based in Los Angeles, by as much as $280 million to take advantage of projected returns of nearly 30%.

The pension fund, which has about $12 billion invested in real estate, also approved allowing CIM to invest as much as 40% of the capital outside the state. The fund is now allowed to invest about 10% outside California.

CIM has invested in 35 projects in 10 urban areas of California since its founding in 1994. It helped revitalize Third Street Promenade in Santa Monica, Old Pasadena and downtown Brea. Current investments include a planned $65-million mixed-use project in Anaheim.