No public pension fund contacted by Pensions & Investments for this story has yet decided to follow CalPERS' lead and provide profit and cost information for the fund's hedge fund, venture capital and private equity investments.
Executives of the $34.7 billion Massachusetts Pension Reserves Investment Management Board, Boston, are discussing whether to reveal more than top-level return information for its $1.6 billion hedge fund portfolio, but "have not yet determined what the policy will be," said Eileen O'Connor, communication director for the state treasurer's office.
The $43.9 billion Oregon Public Employees Retirement Fund, Salem, reveals private equity costs and fees annually in the aggregate but not by fund; it reveals internal rates of return for each fund. Oregon has $4.1 billion in private equity, but doesn't invest in hedge funds.
"Generally, we try to comply with all record requests, and there's not been anything we have been looking at recently, but that's not to say we won't," said Kevin Max, Oregon fund spokesman. "CalPERS is the only one and it is all new, and I'm sure plans everywhere will be looking at this and deciding what move they will make."
The board of the $30.9 billion Colorado Public Employees' Retirement Association, Denver, rejected investing in hedge funds earlier this year, said Katie Kaufmanis, fund spokeswoman. As for the 9.2% of fund assets invested in private equity, a law passed last year allows the fund to disclose only the return information it already reveals on its website, she said.
"We will not include any more detail in the report on alternative investments than is currently posted," Ms. Kaufmanis said. "Colorado statute protects PERA's proprietary information related to investments in private equity."
Officials at the California State Teachers' Retirement System, Sacramento, has no firm plans to follow CalPERS' lead in revealing cost and profit information for its $5.7 billion private equity portfolio, said Sherry Reser, communications director for the $118.7 billion fund. "It is something we might do in the future … but at this point it has not come up for us," she said. "We absolutely operate at a high degree of transparency at this time and certainly want to be transparent as possible in terms of releasing meaningful information about our investments."
In Texas, meanwhile, two state pension funds are challenging an order by Texas Attorney General Greg Abbott that would require release of private equity and venture capital information — including historical valuation, transaction and investment performance data for years up to 2003.
The $80 billion Teacher Retirement System of Texas, Austin, sued after Mr. Abbott's July opinion that the system should provide private equity fund information. In 2002, the University of Texas Investment Management Co was told by the state attorney general's office that it should disclose rates of return for private equity funds.
Under the California settlement, CalPERS is revealing the dollar amount of gain or profit the system received from each fund for calendar years 1999-2003 and management fees and other costs paid by CalPERS to the funds for calendar years 2001-2003. Data for 2004-2005 will be released in the future. CalPERS has $21.1 billion in private equity and $2 billion in hedge funds.
The CalPERS data show a number of funds have yet to produce a profit, including those from such well-known names as Silver Lake Partners LP, Oaktree Capital Management LLC and Lexington Partners Inc.
CalPERS pays slightly more than $200 million annually in management fees to 416 private equity funds that already have $13.5 billion in investments and another $21.1 billion in commitments, according to the now-public data.
In 2003, the largest fee — $8.1 million — was paid to Lombard/
Pacific Partners; CalPERS has had $347 million invested in with Lombard since 1995. The fund returned a profit of $32 million as of 2003.
But the NVCA's Mr. Heesen said that the information provided by CalPERS does not show how a private equity or venture capital fund is truly performing. Funds normally do not show a profit until they start selling their portfolio companies or take them public, which is toward the end of funds' 10-year investment period, he explained.