As the tentacles of the New York pension fund scandal spread on Thursday, CalPERS CEO Anne Stausboll sent a memo to her employees to explain a new policy intended to increase the fund's transparency and avoid the kind of trouble making headlines.
As Bee colleague Dale Kasler and others have reported this week, some "placement agents" -- operatives who help money managers drum up business from public pension funds -- have come under scrutiny for allegedly paying kickbacks to a New York pension officials who investigators say channeled money to the agents' clients.
While firms named in the growing scandal have connections to deals done with CalPERS and CalSTRS, no one has accused either fund of anything illegal. Still, recent events prompted Stausboll to address the issue in a memo obtained by The State Worker late Thursday:
... The use of placement agents by investment firms has been a common practice in the industry, and in and of itself, it is not improper.Nevertheless, our Board wanted to ensure we have the highest level of transparency and disclosure possible. Our Board President directed our staff to draft the policy approved earlier this week. This will go a long way to ensure that our investment decisions are perceived to have been made solely on the merits of proposed investments with full transparency and disclosure. The policy was adopted by the Board and essentially requires that any investment fund we do business with must disclose the names of placement agents they have used and fees. In addition, only placement agents with proper registration with the Securities and Exchange Commission may present a fund to CalPERS.
You can read the Stausboll memo by clicking here.
IMAGE: Anne Stausboll / CalPERS
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