CalPERS' board asked state lawmakers to sponsor legislation requiring placement agents to register as lobbyists.
“We need strong measures to make sure that placement agents who contact pension fund officials are subject to appropriate oversight,” Rob Feckner, president of CalPERS Board of Administration said in a statement today.
Mr. Feckner had pushed for board approval of his plan for new registration requirements for placement agents who help money managers win contracts with the $201.1 billion California Public Employees' Retirement System, Sacramento.
Under Mr. Feckner's plan, compensation paid to placement agents also could not be contingent upon defeat, enactment or the outcome of any proposed investment action by CalPERS.
Placement agents would also be required to report quarterly on any honoraria, gifts, fees or other compensation the placement agents receive.
Board member George Diehr, chairman of CalPERS investment committee, was the only dissenting vote. He said he was concerned that placement agents would have to be put on salary by managers to comply with the new law, a problem for small money managers who could not afford to do that.
Mr. Feckner said in the statement that the CalPERS investment office is confident that access can still be afforded to small and emerging investment managers, even with the legislation.
A CalPERS policy that went into effect in May requires investment partners and external managers to disclose their retention of placement agents, the fees they pay them, and the services they provided.