CalPERS Under Fire Over Portfolio Risk

Jan 13 2011 | 1:05pm ET

One of the world’s largest hedge fund investors may be in some hot water over those investments.

The Securities and Exchange Commission is looking into whether the California Public Employees’ Retirement System had misled investors about the risks in its massive portfolio when it backed a state bond sale, The New York Times reports.

It is not clear that CalPERS’ hedge fund or private equity portfolios are a target of the SEC probe. But the asset classes are a sizeable chunk of the pension’s $220 billion portfolio and contributed to its 25% loss during the financial crisis. That loss has saddled California with billions in replacement costs. The SEC is looking into whether the state should have disclosed that possibility in its bond prospectus.

The CalPERS investigation could lead to the second SEC enforcement action against a state; last year, the agency sued New Jersey for allegedly misleading bond investors about its pension funds’ financial state.

CalPERS said the SEC has only contacted it about its use of placement agents and not about the bond issue.


In Depth

Q&A: Filippo Pignatti Morano On The Ultimate Alternative Investment...Classic Cars

Jan 29 2015 | 12:37pm ET

In 2011, Filippo Pignatti Morano launched a fund to invest in classic cars. FINalternatives...

Lifestyle

Looking For A Hedge Fund Manager? Try Davos

Jan 28 2015 | 8:48am ET

Davos, Switzerland seems to have become the hedge fund capital of the world—at...

Guest Contributor

Five Tips For Successfully Marketing Your Hedge Fund

Jan 30 2015 | 9:14am ET

When it comes to the hedge fund industry, the notion of “build it and it will...

 

Editor's Note