California Assemblyman Kevin Mullin, a Democrat, introduced a bill that would shield real estate investments from public records disclosure.
The bill would also exempt the California counties and their agencies, including pension funds, from disclosing private equity, venture capital, hedge fund or absolute-return fund information. The $253.2 billion California Public Employees' Retirement System, $157.8 billion California State Teachers' Retirement System and University of California have been exempted from doing so since 2006, said Ben Turner, Mr. Mullin's legislative director.
The $41 billion Los Angeles County Employees' Retirement Association, Pasadena, Calif., is behind the portion of the bill that would exempt from public disclosure information regarding non-publicly traded direct real estate investments or non-publicly traded indirect real estate investments, Mr. Turner said in an interview. The $2 billion San Joaquin County Employees' Retirement Association, Stockton, Calif., suggested the other portion of the legislation. The State Association of County Retirement Systems, an association of 20 California county retirement systems enacted by state law to set forth policies and regulations governing the retirement systems, brought the idea to Mr. Mullin's attention, Mr. Turner said.
Mr. Turner said the legislation is needed because public pension funds are losing out on real estate investments because state law requires them to make that information public. Public pension fund real estate managers are concerned that information on deals and properties could be revealed to their competitors, he said.
Currently, Mr. Mullin's office is working with the First Amendment Coalition and newspaper publisher associations to work out a possible compromise. There is currently no organized opposition to the bill, Mr. Turner said. The bill is expected to go to the Assembly Judiciary and the Assembly Local committees, Mr. Turner said.
Annette St. Urbain, CEO of the San Joaquin County Employees' Retirement Association, said there are inconsistencies in current California law. Information such as alternative investment due diligence and ongoing monitoring of alternative investments are barred from disclosure by a state open meetings law referred to as the “Brown Act” but not by the state open records law that applies to the county retirement systems.
David Kushner, LACERA chief investment officer, could not be reached by press time.