CalPERS committed $300 million to Madison Dearborn Capital Partners V, a middle-market buyout firm. The fund also committed $100 million to TA Associates X, a growth-oriented private equity fund; $65 million to TA Subordinated Debt Fund II, which will provide debt financing to companies in which TA X makes equity investments; and up to $50 million to Nogales Investors Fund II, which will invest in small- to medium-size U.S. businesses. The $204.4 billion California Public Employees' Retirement System also committed $700 million to CIM Real Estate Fund III by a vote of 7-6, according to a summary of the investment committee's March 13 closed-session meeting.
Separately, staff urged the CalPERS board to oppose a bill that would require the pension fund to divest securities of companies with ties to the Sudanese government. Staff argued that the bill would limit the board's authority while the board would retain full fiduciary responsibility.
The bill, which has been approved by the California Assembly, would prohibit CalPERS and the $142 billion California State Teachers' Retirement System, both of Sacramento, from buying securities of companies with ties to the Sudanese government and force the systems to sell existing holdings if the portfolio companies failed to meet a series of tests. CalPERS staff estimates the average transaction cost for selling all of its Sudan-linked securities would be about $1.9 million, excluding market-impact costs.
In a memo to the CalPERS board, staff also wrote the bill would indemnify board members, employees, vendors and managers from legal liability but would not indemnify the fund from losses. In addition, staff said the bill should exclude the $1.7 billion CalPERS Supplemental Savings Program and that the bill's deadlines for compliance are too tight.
The issue will be addressed at the June 19 CalPERS investment committee meeting.