Tuesday, May 12, 2009

Placement Agents: CalPERS Sets New Policy For Use Of Placement Agents

The California Public Employees’ Retirement System ("CalPERS") approved a new policy yesterday on the use of placement agents. The new policy comes on the heels of the recent focus on the activities of placement agents by attorneys general across the U.S., as we reported last week. CalPERS will now require external managers to disclose fees and other information about the placement agents they hire to seek CalPERS business. According to a press release issued by CalPERS, the new policy includes the following requirements:

  • CalPERS investment partners and external managers that retain placement agents must disclose such retention, the services performed by the agent, the fees paid for those services, and other information about their engagement.
  • Unless placement agents are registered as broker-dealers with either the SEC or FINRA, CalPERS will decline the opportunity to retain or invest with the external manager or investment vehicle.
  • Disclosure of placement agents’ identities, key person resumes, a description of compensation and services, copies of agreements, and whether the agent is registered with the SEC or as a lobbyist in any state or national government.

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