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

Change In 'Accredited Investor' Definition Could Hurt Crowdfunding Space

Jul 25 2014 | 8:14am ET

The Securities and Exchange Commission is considering changes to its 30-year-old...

Lifestyle

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Guest Contributor

The Truth About Track Record Portability

Jul 24 2014 | 5:55am ET

The number of private funds converting to mutual funds has increased significantly...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note