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CalPERS shared 14 percent of private equity profits with firms

Nov 14 (Reuters) - The California Public Employees’ Retirement System said on Monday it shared about 14 percent of its private equity gains with private equity firms in the past year.

The announcement by the nation’s largest public pension fund marks a milestone toward greater fee and cost disclosures for private equity assets, which make up $26.4 billion or almost 9 percent of the total fund. It is sure to be noticed by other state and city pension funds.

CalPERS and other large public pension funds have been under increasing pressure to track and disclose the costs of private equity. A new California law passed this year requires the state’s public pension funds to disclose more about the fees paid to manage the funds.

CalPERS paid $228.4 million in fees in fiscal year 2015-2016 and shared $539 million in profits. In total, CalPERS realized $3.26 billion in gains from its private equity portfolio last year.

In fiscal year 2014-2015, when the asset class returned 8.92 percent, the pension fund paid $431.7 million in fees, according to a CalPERS report.

Private equity returned 1.7 percent in the past year, considerably lower than in recent years. The asset class returned 10.2 percent over the last decade.

CalPERS has been working with the Institutional Limited Partners Association (ILPA) to shed more light on private equity profit sharing.

Reporting by Robin Respaut; Editing by Dan Grebler