CalPERS, UC Fund Data Are Sought

SACRAMENTO —  A coalition of media companies and government watchdog groups, reacting to rumors of losses at some big hedge funds, are clamoring to get two of California’s biggest public pension funds to disclose more details of their holdings in exotic investments.

The California First Amendment Coalition on Tuesday filed requests under the state public records law with the $182-billion California Public Employees’ Retirement System and the $63-billion University of California pension and endowment fund, seeking information about debt levels at the hedge funds they invest in. They also ask for data on management fees and types of hedge funds in the portfolios.

“The public has a right to know about the risks that public pensions -- and indirectly, all California taxpayers -- are assuming in their hedge fund investments,” said Peter Scheer, executive director of the coalition, which includes a number of media companies, including the Los Angeles Times.

Hedge funds are largely unregulated investment vehicles, favored by sophisticated institutional investors, which use risky strategies such as short selling and leveraging in pursuit of big returns. In recent weeks, Wall Street has been swept by as-yet unfounded speculation that one or more big hedge funds may have suffered heavy losses.

Representatives of both CalPERS and the university endowment, which provides pensions to UC retirees, said they were committed to being open about their investments and were already complying with much of the coalition’s request.

“They’ve overstated the so-called lack of transparency,” said Patricia Macht of CalPERS. She said the investment policies of the nation’s largest public pension fund were already available on the Internet. CalPERS also reports the overall rates of return for its hedge fund portfolio on a monthly and quarterly basis, she said.

That said, CalPERS’ board of directors and its investment fund could consider releasing more detailed information after lawyers analyze the coalition’s Public Records Act request, Macht said.

UC spokesman Trey Davis said the university was trying to balance the public’s right to know with the endowment fund’s ability to do business with hedge fund managers, who want to keep their strategies from being revealed to competitors.

CalPERS and the university are sponsoring legislation, supported by the coalition, that spells out exactly what information should be made public about investments in hedge funds and venture capital funds. The bill, SB 439 by Sen. Joe Simitian (D-Palo Alto), is on the floor of the state Senate, having passed the Judiciary Committee on a bipartisan 7-0 vote.