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Tag Archives: CalPERS

Board Member Margaret Brown Sues CalPERS, Board President Over Gang-Style Retaliation for Efforts to Oppose Its Incompetence

Pulitzer Prize winning reporter Mike Hiltzik has criticized the CalPERS board for “acting childishly” and wasting energy on “intramural bickering” and imposing sanctions on its pro-transparency, pro-accountability board members, first JJ Jelincic, more recently Margaret Brown rather than engage in oversight of the giant fund. But rather than focus on executing its fiduciary duty, the board has doubled down on acting as the staff’s enforcer and attacking dissidents who call out incompetence...

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CalPERS Plans to Blow Its Brains Out: Seeks to Increase Risk by Boosting Private Equity, Private Debt, and Leveraging the Entire Fund

CalPERS is acting exactly the way traders on Wall Street do when they are sitting on serious losses, or in CalPERS case, underfunding so deep that they can’t earn their way out of it. They put on desperate, high risk positions in the hope they can climb back out of their hole. Pros will tell you that this is just about always a fast path to ruin. CalPERS’ version of swinging for the fences is to increase its commitments to its riskiest strategy, private equity, embark on investing in a new...

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Public Pension Plans in a World of Hurt; Even Loyalists Warning of Grim Prospects

US public pensions, unlike their Canadian counterparts, generally set themselves up for trouble by using unrealistically high return assumptions. The effect was to make pensions look cheaper than they were by understating the value of the liabilities and exaggerating the odds of earning enough to make good on them. Some systems made matters worse, in some cases like New Jersey, much worse, by choosing not to fund the pensions adequately. And then repeated applications of the...

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Universa Debunks CalPERS’ Defense of $1 Billion Tail Hedge Miss; Insider Accounts Expose Additional Misrepresentations

The controversy over CalPERS CIO Ben Meng’s decision to exit tail risk hedges just before a $1 billion payday is not going away as quickly as CalPERS would like. The Nassim Nicholas Taleb-affiliated fund manager, Universa, which managed the bigger and more lucrative hedge, has cleared its throat to debunk CalPERS’ excuses justifications for terminating the program despite it having the support of CalPERS’ consultant, Wilshire, and over the objections of staff. Now Universa itself has...

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More Public Pension Fund Pain: LACERS Reports Hit to Liquidity from Private Equity Capital Calls; Are Fund Managers Exploiting the Dumb Money Yet Again?

In case you managed to miss it, public pension funds are under stress, to the degree that Mitch McConnell bothered kicking them while they were down. And as we’ll show shortly, public pension funds are facing more pain due to private equity funds making them cough up money to meet capital calls. Public pension funds tight on available cash to pay benefits may wind up selling assets at fire-sale prices, as CalPERS did in 2009. But any pension fund that winds up making private-equity-induced...

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CalPERS Out of Control: Stunningly High Number of Personal Trading Violations, Yet Board Ignored the Misconduct

Pictures like this are indeed worth a thousand words. From Item 5d for CalPERS’ Risk and Audit Committee meeting last week. This misconduct matters ever more than ever because the board wants to reduce its already lax supervision by delegating even more authority to staff. Despite the whopping number of violations, CalPERS executives orchestrated the Committee meeting to minimize visibility of this disturbing record, and almost succeeded. Since the board played along, failing even to...

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Mitch McConnell to State Pension Funds: Drop Dead

The Senate Majority leader Mitch McConnell today said there would be no bailout for state pension funds and states should declare bankruptcy instead. His remarks were no doubt meant to apply to any municipalities that were hoping to get rescue money and direct some of it to their pensions. From Bloomberg: Senate Majority Leader Mitch McConnell said Wednesday he favors allowing states struggling with high public employee pension costs amid the burdens of the pandemic response to declare...

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Hissy Fit by CalPERS Board: Falsely Blames Margaret Brown for Staff Leaks of CIO Meng’s $1 Billion Giveup, Public Opposition to Staff Coup

The CalPERS board and staff need to take lessons from Donald Trump, the acknowledged master of factually challenged, emotional-laden personal attacks. The Investment Committee meeting’s amateurish imitation yesterday was painful to watch. Or is this a sign, as is true on so many other fronts, that CalPERS is unable to learn from the best? The triggers for the protracted, unseemly exhibition of impotent rage were frustration over things that any pol or seasoned professional ought to be able...

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Press Ferrets Out More Falsehoods by CalPERS CIO Ben Meng, Evidence of Poor Leadership, in Giving Up >$1 Billion Hedge Payday

Bloomberg, the Wall Street Journal, and Institutional Investor have published new reports in the last two days on the escalating controversy surrounding CalPERS CIO Ben Meng missing out on over $1 billion in gains1 by exiting a tail risk hedge right before the coronacrash. Meng’s self-defense is backfiring. Not only is the press exposing more layers of his misrepresentations, but Meng’s dogged refusal to admit error is proof of that he is unfit for his job. Meng keeps trying to pass of the...

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CalPERS Staff Seeks to Strip Board of Remaining Authority Even as Press Exposes Multi-Billion Cost of Lack of Supervision; Elected Board Members Thumb Nose at Public by Seeking to Be Paid for Doing Almost Nothing

Admittedly, most CalPERS board members have been working hard at imitating potted plants. The rare exceptions that attempt to perform their constitutionally-mandated jobs as fiduciaries, like JJ Jelincic and now Margaret Brown, are subjected to CalPERS-orchestrated attacks in the press and petty hazing. However, in a brazen power grab, the staff is about to have the board sign away its remaining power, even though the board members cannot escape their legal responsibilities by saying, “Oh,...

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