A coalition of state treasurers and elected officials will soon submit a letter to the SEC calling on the regulator to push for greater transparency and fee disclosures from private equity managers.
The letter will
address public pensions’ ability to track asset valuations, the reporting of
profits, waterfall distributions, and other issues, said Wyoming
Treasurer Mark Gordon. The letter is expected to be made
public on Tuesday night or on Wednesday, July 22.
Besides Gordon,
signatories include: California State Treasurer John Chiang, Rhode
Island General Treasurer Seth Magaziner, Nebraska Treasurer Don
Stenberg, District of Columbia Treasurer Jeffrey Barnette,
New York State Comptroller Thomas DiNapoli, Virginia
Treasurer Manju Ganeriwala, Vermont Treasurer Beth Pearce,
New York City Comptroller Scott Stringer, Oregon
Treasurer Ted Wheeler, Missouri Treasurer Clint
Zweifel, and South Carolina Treasurer Curtis Loftis.
South Carolina’s
Loftis said in a statement emailed to Buyouts: “Working
people have the right to know what their pension funds are paying Wall Street
for investment services. Too often public pension funds pay outrageous fees and
expenses that rob the funds of the ability to pay retirement benefits.
Standardization of fees and an increase in pension fund transparency is long
overdue.”
Other signatories
were unavailable for comment. The SEC was not available for comment at press
time.
The SEC has
zeroed in on private equity managers’ use of fees and expenses over the last
year and a half, and recently fined Kohlberg Kravis Roberts & Co more
than $30 million for misallocating co-investors’ broken deal expenses to its
flagship fund.
The letter comes
as the California Public Employees’ Retirement System and the California
State Teachers’ Retirement System recently came
under fire for failing to track the
amount of carried interest accrued by their private equity fund managers.
However, Wyoming’s
Gordon noted that CalPERS and CalSTRS did not prompt the letter. The letter was
“independently generated” and was the result of a coalition of Treasurers
discussing transparency issues for more than a year, he said.
By peHUB
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