Your PERS Dollars at Work
The SacBee had a series of articles this week about excessive fees paid to middlemen who convinced PERS to invest with their client. CalPERS is now launching a "special review" of a former board member who made $50 million in fees for getting his client's investment purchased by CalPERS.
Here is an excerpt from the story (click here):
Stepping into a widening national probe of investment marketing agents, CalPERS on Wednesday launched a "special review" of a former board member who made $50 million in fees pitching deals to the pension fund.
The discovery of hefty fees paid to former board member Alfred Villalobos sparked a significant development in an ongoing investigation of placement agents � marketing middlemen hired by private equity firms and other money managers seeking investment dollars from public pension funds like CalPERS.
Villalobos, who served on CalPERS' board from 1993 to 1995, runs Arvco Financial Ventures, a placement agent firm in Stateline, Nev. As reported by The Bee in June, the Arvco firm is one of the most prolific placement agents in securing business from CalPERS, winning commitments totalling $3.3 billion since 2006.
...He added that Villalobos' fees were typical for placement agents and weren't a secret around CalPERS. He said Villalobos has succeeded as a placement agent because his clients "have made good returns for CalPERS."
The 11 deals disclosed by CalPERS Wednesday have mostly lost money so far, according to CalPERS investment reports. But experts say that isn't unusual for private equity investments in their early stages. Two of the older deals, dating to 2003 and 2004, are profitable.
The CalPERS documents, meanwhile, show that two retired state senators, Richard Polanco and Bill Campbell, worked on deals for Villalobos, flying first class or business class. The fare was reimbursed by Apollo Management.
CalPERS in May adopted a disclosure policy on placement agents and asked its various investment partners for documents on their hiring of agents. Those documents yielded the discovery of the fees paid to Villalobos' firm, Arvco.
I believe that all PERS members recently received ballots in the mail for their Board of Directors election. I'm sure that most of you assumed that employees ran for the Board to help protect our investments--I'm now thinking that some candidates had more in mind than ensuring great returns for the membership...
Here is an excerpt from the story (click here):
Stepping into a widening national probe of investment marketing agents, CalPERS on Wednesday launched a "special review" of a former board member who made $50 million in fees pitching deals to the pension fund.
The discovery of hefty fees paid to former board member Alfred Villalobos sparked a significant development in an ongoing investigation of placement agents � marketing middlemen hired by private equity firms and other money managers seeking investment dollars from public pension funds like CalPERS.
Villalobos, who served on CalPERS' board from 1993 to 1995, runs Arvco Financial Ventures, a placement agent firm in Stateline, Nev. As reported by The Bee in June, the Arvco firm is one of the most prolific placement agents in securing business from CalPERS, winning commitments totalling $3.3 billion since 2006.
...He added that Villalobos' fees were typical for placement agents and weren't a secret around CalPERS. He said Villalobos has succeeded as a placement agent because his clients "have made good returns for CalPERS."
The 11 deals disclosed by CalPERS Wednesday have mostly lost money so far, according to CalPERS investment reports. But experts say that isn't unusual for private equity investments in their early stages. Two of the older deals, dating to 2003 and 2004, are profitable.
The CalPERS documents, meanwhile, show that two retired state senators, Richard Polanco and Bill Campbell, worked on deals for Villalobos, flying first class or business class. The fare was reimbursed by Apollo Management.
CalPERS in May adopted a disclosure policy on placement agents and asked its various investment partners for documents on their hiring of agents. Those documents yielded the discovery of the fees paid to Villalobos' firm, Arvco.
I believe that all PERS members recently received ballots in the mail for their Board of Directors election. I'm sure that most of you assumed that employees ran for the Board to help protect our investments--I'm now thinking that some candidates had more in mind than ensuring great returns for the membership...
Labels: Pension
posted by City Manager @ 7:55 AM
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