Compliance September 23, 2011

CalPERS Pension Managers Fined for Unreported Gifts

September 23, 2011 (PLANSPONSOR.com) – Sixteen executives and investment managers from the California Public Employees Retirement System (CalPERS) have been fined by California’s political watchdog agency. 
 
Reported by

The individuals were fined for failing to report gifts, which included food, wine, and baseball and Rose Bowl tickets.

According to the AP, the largest fine was $3,600, which was against Shaun Greenwood, a portfolio manager for CalPERS. He failed to report $2,700 worth of clothing, alcohol, meals, and event tickets.

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The gifts mostly came from the fund’s investment partners, including Goldman Sachs, UBS, Credit Suisse, the Carlyle Group, and LP Capital Advisors.

These fines are the latest spinoff from a larger investigation that brought a lawsuit by the attorney general’s office last year alleging fraud and kickbacks, the AP reports.

The ethics investigation led to a review of gifts received by pension fund employees and board members dating to 2006. The 16 fines were agreed upon between the commission’s investigators and the employees.

The fines include $400 for CalPERS Board President Rob Feckner, who failed to report five meals worth a total of $277 in 2007 and 2008. Board member Louis Moret was fined $400 for accepting two meals worth $217 in 2008. Others failed to report wine, clothing and entertainment that included bowling, golf, and kayaking outings.

Investing September 23, 2011

Mutual Funds See Gains Despite Dramatically Slower Pace

September 23, 2011 (PLANSPONSOR.com) – Long-term funds took in $370 billion in cash contributions globally, according to Strategic Insight (SI).  
 
Reported by

“Year-to-date results through July are markedly lower than the same period in 2010, when flows reached $570 billion, yet much better than the $170 billion in net redemptions for the first seven months of 2008. SI estimates $90 billion in net outflows for August globally—compared to $270 billion in redemptions during October 2008,” said Daniel Enskat, Senior Managing Director and Head of Global Consulting for SI. “On a product level, selected fixed income and equity themes, multi-asset income, ETFs, real estate, commodity, and selected alternative products are continuing to attract new cash flows.”

Slightly positive flows in Asia partially offset redemptions from Europe in August, where greater market concerns over the sovereign debt crisis during the month resulted in $75 billion in net outflows. 

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“In the past, spikes in net redemptions in response to market volatility were typically short-lived and limited in scope,” said Enskat. “Strong outflows from long-term funds in both Europe and the U.S. in October and November 2008 were followed by a sharp rebound in flows in the first half of 2009. Until recently, three-month rolling flows have stayed at around $100 billion. 

“The fund industry has faced and weathered uncertain economic times at many points in the past, but the current market volatility seems structurally different from prior crises.”

For more information on this report visit http://www.sioline.com.

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