May 7, 2001 (PLANSPONSOR.com) - An investigation
into the alleged misallocation of initial public share
offerings (IPO), which has targeted investment banks and
their institutional clients, may broaden to include
individual recipients of new equity listings.
This coincides with the revelation that Morgan Stanley
awarded Donald DiFrancesco, acting governor of New Jersey,
higher than average allocations in more than 30 highly
sought-after IPO offerings.
According to tax records, he sold shares within a day at
between 20% and 400% profit.
CalPERS Ups Stake in VC Fund Despite Volatility,
Dot.Com Shakeout
April 19, 2000 (PLANSPONSOR.com) - In a move that
shows continued plan sponsor interest in venture capital
investments, CalPERS approved an additional $400 million to
its venture capital unit California Emerging Ventures. "Very
attractive" returns fueled the decision, according to Barry
Gonder, Senior Investment Officer and CalPERS' head of
California Emerging Ventures.
California Emerging Ventures is a venture capital
partnership between the
California Public Employees Retirement
System
and
Grove Street Advisors
of Massachusetts and San Francisco. Calpers’s earlier VC
investments have resulted in a net internal rate of return
(IRR) of 182%. With more than $168 billion in assets,
CalPERS is America’s largest pension fund.
Given the volatile equity markets and expected shakeout
in dot.com investments, this vehicle “will not sustain its
current high net IRR level, but the performance is evidence
that the program is off to a good start and should generate
attractive returns for CalPERS over the long term,” wrote
Gonder in his proposal to the pension fund’s
board.
Early Commitments
In October 1998, CalPERS first allocated $350 million to
venture capital projects. Of that amount, nearly $55
million has been committed to direct investments in
portfolio companies. On December 31, 1999 this investment
was valued at $87 million.
Venture capital allocations to partnerships are fully
committed 12 months earlier than expected, with commitments
of $296 million to approximately 39 partnerships after
reviewing 480.
The venture capital fundraising cycle, typically 18
months, has dropped to 12 months, said Gonder. “The
increased pace,” Gonder said, “opened a number of
additional doors for California Emerging Ventures.”
California Focus
“A special emphasis is placed on investing in
California-based partnerships and portfolio companies,”
said Gonder. “The California-based venture capital
industry appeared to offer a particularly attractive
investment opportunity, as technology-based ventures are
driving significant growth.”
Allocating the additional $400 million “takes a couple
months or more,” said CalPERS spokesman Brad Pacheco.
Fifty-seven percent of these assets will fund in-state
companies in the consumer, healthcare, Internet and
technology sectors.
Venture capital investments are part of CalPERS’
$10.4-billion alternative investment portfolio, and less
than 2% of the total fund.