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CalPERS Invests $200 Million in Japan Corporate Governance Fund

Submitted by: California Public Employees' Retirement System (CalPERS)

Categories: Corporate Governance

Posted: Apr 18, 2003 – 12:00 AM EST

 

Apr. 18 /CSRwire/ - SACRAMENTO, CA - The California Public Employees' Retirement System (CalPERS) has approved a $200 million investment in The Taiyo Fund -- a fund that will employ corporate governance activism to turn around underperforming publicly traded companies in Japan.

Taiyo Fund Management (TFM), a privately held limited liability corporation, will serve as the general partner of the fund. TFM is a joint venture between Monterey, California-based Taiyo Pacific Partners LLC (TPP) and WL Ross & Co. (WLR), a New York-based investment firm founded in 1997 by Wilbur Ross. TPP and Ross have targeted to raise $1 billion for the fund.

CalPERS will be a 20 percent equity owner in the fund.

The Taiyo Fund will make significant investments in a small number of publicly traded companies in Japan and use its influence as an active investor to effect corporate governance, financial and operational change to benefit shareowners.

"Our experience indicates that active corporate governance strategies have proven successful and add value to our investment portfolio," said Sean Harrigan, President of CalPERS Board of Administration. "We can expect that shareowners will play a greater role in the Japanese markets, contrary to the traditional control of large banks and management. We believe the time is right to invest in this kind of partnership in Japan."

The Taiyo Fund will be governed by a five-member board consisting of principals of TPP and WLR. Wilbur Ross will chair the Fund's Investment Committee.

"The principals of this fund have a successful track record in unlocking value in Japanese corporations through reasonable corporate governance efforts," said Rob Feckner, Chair of CalPERS Investment Committee.

CalPERS participation in The Taiyo Fund increases the pension fund's exposure to Japan corporate governance funds to $400 million. Last year, CalPERS made a $200 million investment in Tokyo, Japan-based SPARX Asset Management Company, Ltd.

Both funds are part of a $1.2 billion investment allocation to external active corporate governance managers in the U.S., Japan and Continental Europe made by CalPERS in November 2001. CalPERS has a total of $3 billion committed to corporate governance investment strategies.

CalPERS is the nation's largest public pension fund with assets totaling $130 billion. The System provides retirement and health benefits to 1.3 million State and local public employees and their families. For more information about CalPERS, go to www.calpers.ca.gov.

For more information, please contact:

Brad Pacheco or Pat Macht CalPERS
Phone: +1-916-326-3991

 

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