CalPERS investment committee clarifies private equity authority

Real Desrochers CalPERS
Real Desrochers

CalPERS' investment committee Monday approved changes that will allow Real Desrochers, the senior investment officer, private equity, to increase the size of co-investments made in conjunction with private equity funds.

The new authority clarifies what Mr. Desrochers said was the original intent of his delegated authority — to allow the co-investments to be as large as the total commitment CalPERS makes, combined, to a particular manager's funds.

Mr. Desrochers said in agenda materials for the meeting that the way the delegated authority had been drafted, co-investments were limited by the amount of the investment CalPERS had in the particular fund alongside of which it was making the co-investment.

Another change approved by the investment committee makes it clear Mr. Desrochers has the authority to purchase private equity investments in the secondary market.

Mr. Desrochers said the authority was implied, but that legal staff, investment staff and outside consultants believed the wording needed to be clarified.

The $274.8 billion California Public Employees' Retirement System, Sacramento, has been increasingly trying to buy private equity investments in the secondary market, bidding several times for stakes in the last-half year, sources said. Those efforts were unsuccessful, the sources said.

CalPERS has $31 billion invested in private equity and an additional $13 billion committed.