CalPERS pulled out of MPM BioEquities, a long-short hedge fund focusing on small and midsize biotech stocks. The $205.8 billion California Public Employees' Retirement System, Sacramento, redeemed $44.9 million from the hedge fund from April through June, according to records released this week by the pension fund.
Kurt von Emster, an MPM partner who oversees the $200 million biotech fund, said CalPERS — a seed capital investor when the fund was launched in 2001 — has been redeeming its position over the past three years because the pension fund no longer invests in specific sector hedge funds. CalPERS officials declined to provide further comment, according to spokesman Clark McKinley.
Separately, CalPERS informed H.J. Heinz Co., Pittsburgh, that the fund will vote its 1.66 million Heinz shares — roughly 0.5% of the company's total stock — to re-elect all 12 members of the Heinz board of directors, confirmed Brad Pacheco, spokesman for CalPERS.
The fund's decision bolstered Heinz's position in its proxy fight with hedge fund Trian Fund Management. The hedge fund is run by Nelson Peltz, who wants to nominate his own board members. Mr. Peltz, who began investing in Heinz stock in February, criticized the food company's stock performance and said a change was necessary, according to Heinz spokesman Ted Smyth. Mr. Peltz, whose fund reportedly owns about 5% of Heinz, hopes to replace some of the board's members at the company's Aug. 16 shareholder meeting.
Mr. Pacheco said CalPERS sided with Heinz because the company agreed to take several steps to alter its administration, including adopting a majority vote policy for the board and appointing two new independent directors. Heinz is still in the process of recruiting those directors, he said.
