Calpers chief backs lobbyist rules for placement agents

Wed Nov 11, 2009 7:58pm GMT
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SAN FRANCISCO, Nov 11 (Reuters) - The president of Calpers urged fellow board members at the biggest U.S. public pension fund on Wednesday to back his plan to require placement agents to be subjected to laws for lobbyists in response to events alleging their "undue influence" over investment decisions.

Placement agents are middle-men who help investment companies, notably private equity and real estate firms, win contracts from pension funds.

They have come under increasing scrutiny as a result of a pay-to-play probe in New York that has uncovered a web of connections between placement agent firms, investment firms and public retirement systems across the country.

The probe has touched on placement agents seeking deals at Calpers, the $200 billion California Public Employees' Retirement System, and the fund this year began pressing its money managers to disclose who their placement agents are and the fees they collected for their services.

Calpers has learned placement agent firms led by a former board member have reaped tens of millions of dollars in fees for helping investment firms win business at the fund.

Associates of that former board member have also been found to have contributed money to the reelection effort of a veteran board member who chaired Calpers' investment committee.

Calpers board President Rob Feckner in a letter to other board members called for strengthening rules to better police placement agents -- on top of a state law passed this year that would restrict how they do business at state pension funds.

"Feckner said stronger rules need to be put in place given recent events that have alleged undue influence by placement agents attempting to sway investment decisions of pension funds in California," according to a Calpers statement.

Feckner in the statement said his proposal aims to improve transparency on its investments.  Continued...

 
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