NYTimes: Calpers Paid $3.4 Billion to Private Equity Firms

For years, state pension funds have invested money earned by teachers, firefighters and other government employees with private equity firms without having a full picture of how much they were earning and what they were paying in expenses.

On Tuesday, the California Public Employees’ Retirement System disclosed for the first time that it had paid $3.4 billion since 1990 to the biggest private equity managers on Wall Street, including like firms like Carlyle, Blackstone and Apollo. Calpers also said it had made $24.2 billion in profits from private equity firms over the same period, according to its new data-collecting program, called Private Equity Accounting and Reporting.

The move by Calpers, the country’s biggest state pension fund, to disclose the details of its investment profit — called carried interest — could help to pave the way to more transparency in the private equity industry, historically one of the most secretive corners of the financial world.

“Private equity is a complicated asset class and the board and investment office staff will now have even more insight into our program,” Henry Jones, Calpers’s board vice president and the chairman of its investment committee, said in a statement on Tuesday.

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