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CalPERS to improve private equity disclosure

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US – The largest US pension fund, CalPERS, has announced that it will be improving the disclosure of its private equity investments to provide a higher level of transparency.

Following a vote by the board of administration, the fund will now publish internal rate of returns for its funds and fund of funds, and amounts of cash invested, and profits realised from that cash invested. The disclosure will be made on a quarterly basis.

Having examined the issue of appropriate level of disclosure, CalPERS says it has decided to continue to withhold information on the identities and performance of private companies which make up investments of each fund as it would harm its ability to invest in the funds.

“Consistent with CalPERS’ fiduciary duty we believe that this type of disclosure would cause economic harm to CalPERS, the companies and fund managers,” says Mark Anson, chief investment officer for the pension fund.

The aim is to “provide the highest level of transparency that will not conflict with our fiduciary duty to our members – to maximise investment returns,” explains Sean Harrigan, president of the board.

CalPERS expects to release its private equity performance data on its website by April 30.

CalPERS made the performance of its private equity funds secret in 2001, but was taken to court in October by the San Jose Mercury News. The newspaper had claimed that because the fund had once made the information publicly available, it was legally bound to continue to disclose performance. CalPERS settled the lawsuit and pledged to review its disclosure policies by this month.

CalPERS is the Californian state and local public employees retirement system, with assets totalling 131 billion dollars.

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