CalPERS endorsed new principles proposed by the Institutional Limited Partners Association to promote stronger alignment between limited and general private equity partnerships, improved investment reporting and transparency, and enhanced partnership governance.
The ILPA introduced the private equity principles on Sept. 8, offering guidelines to rein in management fees, develop greater transparency for fees and underlying portfolio performance, and strengthen the rights of limited partners to suspend, terminate or dissolve a fund, according to a statement from the $194 billion California Public Employees' Retirement System, Sacramento.
CalPERS investment committee endorsed the principles at its meeting on Monday.
“These principles mark the beginning of a new chapter in the private equity industry,” CalPERS CIO Joseph Dear said in a news release. “As our capital commitment to private equity grows, it is important that the nature of our partnerships also evolve to include improved governance rights consistent with the maturing of the asset class.”
As of July 31, CalPERS had $20.6 billion invested in private equity and an additional $21.9 billion in unfunded private equity commitments.