External to legally required public discussion, it appears that the California Public Employees’ Retirement System (CalPERS), is partnering with the New York global investment management corporation, BlackRock, by outsourcing its private equity operations to the firm. Apparently BlackRock is also the financial firm that brokered CalPERS’ involvement in the Stuyvesant Town real estate deal, in which CalPERS lost its entire $500 million investment.
For the protection of constituents and beneficiaries, the 2004 Bagely-Keene Open Meeting Act requires that state boards and commissions publicly notice their meetings, prepare agendas, accept public testimony and conduct their meetings in public unless specifically authorized by the Act to meet in closed session.
In light of the previously failed investment, a publicly noticed meeting seems highly important in the recent actions taken by CalPERS. Additional concerns highlight how the recent investment strategy garners higher costs with lower returns and no guarantee of improved performance.
Financial critics stress how the level of financial risk involved in the CalPERS investment approach is commonly recommended for high net worth individuals or highly diversified investment groups.
CalPERS may consider outsourcing its investment portfolio to be a more efficient manner of augmenting financial resources for its beneficiaries. A possible more effective means of acting upon such a consideration would be to allow that a number of firms bid on handling the CalPERS fund with a CalPERS analytical choice of the most secure partnership that amasses the best return.
Subsequent to careful review, by law it is incumbent upon the organization to present its findings to beneficiaries for testimony and feedback.
Further information on the CalPERS investment decision can be found in the Naked Capitalism article, CalPERS Illegally Trying to Hide Its Scheming to Hand Over Private Equity to BlackRock