BOSTON, Nov 15 (Reuters) - Calpers, the biggest U.S. public pension fund, is getting out of the name-calling business.
After nearly two decades of publishing its annual “name-and-shame” Focus List that lists the worst-performing publicly traded companies, the California Public Employees Retirement System said on Monday it will try a different approach.
Now the $220 billion fund, known as Calpers, will approach publicly traded companies through private contacts and rely on proxy actions to encourage underperformers to improve, it said in a statement.
“The Focus List has served us well by calling public attention to some of the worst market players, but the time has come for a more effective approach,” said Rob Feckner, Calpers’ board president, in a statement.
“Many of our portfolio companies are adopting improved governance practices, and we’re getting better alignment of interest with them than we experienced even a few years ago,” Feckner said.
Calpers, which has publicly named the worst performers since 1992, attracts attention with its investment selections largely because of its size. Over the years companies like drug maker Eli Lilly LLY.N, insurance broker Marsh & McLennan MMC.N and furniture maker La-Z-Boy LZB.N have all been the fund's Focus List.
The pension fund decided to shift course after research showed that companies responded better to being approached in private instead of being embarrassed in public.
On average, all companies contacted through the Focus List program, including those never placed on the list, generated a total cumulative excess return of 15.8 percent above their respective benchmarks after three years, and 9.4 percent after five years, the fund said. (Reporting by Svea Herbst-Bayliss; Editing by Leslie Adler)
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