CalPERS Commits $300M To Japanese, Korean Activist Funds

Jul 2 2008 | 12:40pm ET

The California Public Employees Retirement System is betting on a pair of Asian activist funds to give its corporate governance portfolio a boost.

The $235 billion fund committed $200 million to Taiyo Cypress Fund, which takes an activist approach to Japanese public and private companies.

TCF is a joint venture between Taiyo Pacific Partners, a California-based firm, and WL Ross & Co., a New York-based private equity shop. The fund has a target size of between $2 billion to $4 billion.

The portfolio will hold eight to 10 publicly-traded companies representing no less than 65% of the portfolio, with the remainder of the portfolio to be comprised of private companies.

CalPERS is also committing $100 million to Lazard Korea Corporate Governance Fund, an open ended Irish-listed offering launched in 2006 with a targeted capacity of roughly $600 million.

The fund’s strategy is to invest in small and mid-sized Korean companies that it deems undervalued with “significant room to improve governance principles and practices.”

“Notably, the fund will pursue its objective through a collaborative discussion between company management, the fund and other shareholders, rather than a confrontational approach,” the firm said in an internal memo.

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