CalPERS wants to shed some private equity investments

This story is taken from Sacbee /

dkasler@sacbee.com

Published Wednesday, Apr. 11, 2012

CalPERS, still retooling its massive portfolio, is trying to sell off $1.5 billion in private equity investments.

The big pension fund has hired investment banker UBS to sell the investments. Marketing efforts should begin as early as this week, said a source familiar with CalPERS' plans but not authorized to discuss the matter.

CalPERS has been working to redo its investment lineup since financial markets crashed in 2008, with a particular emphasis on overhauling its real estate holdings.

Now it's taking a look at private equity, investments made in companies that aren't publicly held. "It's part of the overall restructuring," the source said.

The investments to be sold represent less than 5 percent of the $33.3 billion private equity portfolio at the California Public Employees' Retirement System. CalPERS' total investments come to $234.3 billion.

CalPERS plans to sell portions of some assets and all of some others, particularly investments that haven't performed well. In those cases, the pension fund would sever ties with outside investment managers hired to run those deals.

"It's about weeding out some of the bad managers," the source said.

Previously, CalPERS dismissed or accepted resignations of five firms that were managing its real estate deals. CalPERS lost around $9 billion when the real estate market collapsed.