State legislatures are taking steps to ensure their public pension and endowment funds will be attractive investors once again for top private equity funds.
Media companies and government watchdog groups in the past few years have become increasingly aggressive in seeking information on the performance of public entities' investment portfolios, in several cases taking legal steps to obtain the data.
Executives of the top-tier private equity funds — reluctant to have sensitive performance data released — responded by rejecting these pension and endowment funds as investors or limiting asset and performance information they were given.
State legislators across the country now are giving their public fund executives tools to help them get back into top private equity funds.
New laws in Colorado, Michigan, Virginia, Maryland, Utah and Texas limit the information public funds are required to release. A bill in Illinois is awaiting the governor's signature, and in California and Pennsylvania, bills on the issue have been introduced.
While public pension funds and endowments and their state legislatures are doing the only thing they can to make themselves attractive investors, the entire effort might reap few results, industry insiders said.
"Anything that evens the playing field might be helpful at the margin," said Gary Robertson, senior vice president of San Francisco consulting firm Callan Associates. "But I don't know how helpful it will be." What legislatures can do, legislatures and courts can undo, Mr. Robertson added.
