CalPERS Tightens Ethics Rules
New ethics rules now mandate that board members channel communications on existing or potential investments to CIO Joseph Dear. Board members also cannot advocate for an investment with staff outside of board or committee meetings. The new policy comes as board member Charles Valdes’s term is set to expire. He will leave the board after a December recommendation by California’s political campaign watchdog agency that he be fined for receiving member-at-large board campaign contributions in 2005 that exceeded state limits.
Most of those contributions came from associates of Alfred Villalobos, a former CalPERS board member. CalPERS is looking at payments of more than $50 million made between 2003 and 2008 to ARVCO Financial Ventures, a firm headed by Villalobos, who served on the pension fund’s board from 1993 to 1995.
Meantime, the pension fund recently announced that Kurato Shimada and Joseph “J.J.” Jelincic have won member-at-large seats on its board. Jelincic won a run-off election for the seat being vacated by Valdes. Jelincic is an investment officer at CalPERS and a former president of the California State Employees Association. His election may help the limited partner distance itself from image problems arising from questionable fees paid to placement agents by private equity firms.
Worldwide Fundraising At 5-Year Low
Only $246 billion was raised by 482 private equity funds worldwide in 2009, the lowest total since 2004, according to a report released Jan. 7 by Preqin, a London-based data provider. That was well below the $636 billion raised In 2008, and the record $646 billion in 2007. In the fourth quarter of 2009, only $35 billion was gathered by 75 funds worldwide, the lowest quarterly fundraising total since the third quarter of 2003.
Other highlights from the study include the following:
• In 2009, buyout funds raised the most capital worldwide, $102 billion raised by 84 funds.
• In the fourth quarter, 13 buyout funds closed with a total of $14 billion.
• Funds focusing mainly on North America raised the most in 2009: 228 funds raised $145 billion.
• The largest fund to close in 2009 was
• The largest fund to close in the fourth quarter was
• The average time for a fund to reach a final close has risen dramatically over the past two years, now standing at more than 18 months for funds closed in 2009, up from one year for funds closed in 2007.
• In 2009, 60 percent of limited partners surveyed made at least one new commitment to a private equity fund.
• About half of investors surveyed plan to make their next commitment to a private equity fund in the first half of 2010; 16 percent plan to wait until the second half.