Sunday, May 9, 2010

CalPERS Negotiating for Lower PE fees

Following-up on the January 31st post about pension plans recently gaining negotiating leverage over PE firms investing - or seeking to invest - the plans' funds, here's a link to news last week from Pensions & Investments that CalPERS has negotiated fee reductions of $125 million (over five years) from Apollo Global Management, the PE firm run by Leon Black and colleagues:

http://www.pionline.com/article/20100503/PRINTSUB/305039998

Apparently CalPERS is seeking reduced fees from most PE firms who "run money" for CalPERS.

Two days after publication of the Pensions & Investments article, the California attorney general filed a civil lawsuit against a "placement agent" intermediary between CalPERs and Apollo. (The "placement agent" is a former CalPERS board member.) The lawsuit alleges that the "placement agent's" firm received more than $45 million in undisclosed commissions from money managers in connection with CalPERS investment business over a four year period beginning in 2005. Here's a link to a WSJ article about the lawsuit:

http://online.wsj.com/article/SB10001424052748704370704575228431185782698.html?mod=WSJ_latestheadlines

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