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CalPERS to disclose public equity performance data quarterly

The California Public Employees' Retirement System has announced its plan to ‘adopt a comprehensive performance disclosure policy for private equity investments that balances the need for transparency and protection of members' pension benefits'.

Internal rates of return (IRR) will be published on a quarterly basis for funds and funds of funds, as well as total cash invested and profits realised from that cash.

‘We intend to provide the highest level of transparency that will not conflict with our fiduciary duty to our members - to maximise investment returns,' said Sean Harrigan, president of the CalPERS board.

CalPERS will not be publishing the performance of portfolio companies, however, ‘because its release could harm CalPERS' ability to invest in the funds'.

Mark Anson, chief investment officer, said: ‘There is a consensus in the industry that providing transparency of individual fund performance would not be detrimental to investment results, but there will be material negative impact if we disclosed portfolio company data.'

CalPERS originally began to publish quarterly performance data for its private equity funds in spring 2001, but pressure from GPs led to this information being withdrawn a few months later.

The decision to offer a ‘blueprint' to the industry in terms of public disclosure follows months of speculation about the impact of such a step. San Jose Mercury News filed a lawsuit in November 2002 to force CalPERS to make its fund investment performance public, but many GPs and LPs have protested against the plan, saying that it would have a negative effect on the industry.

The pension fund's decision is likely to have a profound effect on the private equity industry as a whole and might well presage a new era of far greater disclosure.

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