Nov 14 The California Public Employees’
Retirement System said on Monday it shared about 14 percent of
its private equity gains with private equity firms in the past
year.
The announcement by the nation’s largest public pension fund
marks a milestone toward greater fee and cost disclosures for
private equity assets, which make up $26.4 billion or almost 9
percent of the total fund. It is sure to be noticed by other
state and city pension funds.
CalPERS and other large public pension funds have been under
increasing pressure to track and disclose the costs of private
equity. A new California law passed this year requires the
state’s public pension funds to disclose more about the fees
paid to manage the funds.
CalPERS paid $228.4 million in fees in fiscal year 2015-2016
and shared $539 million in profits. In total, CalPERS realized
$3.26 billion in gains from its private equity portfolio last
year.
In fiscal year 2014-2015, when the asset class returned 8.92
percent, the pension fund paid $431.7 million in fees, according
to a CalPERS report.
Private equity returned 1.7 percent in the past year,
considerably lower than in recent years. The asset class
returned 10.2 percent over the last decade.
CalPERS has been working with the Institutional Limited
Partners Association (ILPA) to shed more light on private equity
profit sharing.
(Reporting by Robin Respaut; Editing by Dan Grebler)