Problems With CalPERS Non-Disclosure List

CalPERS may have messed up. The pension giant last night released a list of eight private equity and venture capital firms that did not reply to a voluntary request for historical placement agent information, but at least four of the firms claim that they did indeed comply.

Ripplewood Holdings, EnerTech Capital, Fenway Partners, Pinnacle Ventures and GTCR tell peHUB that they are working with CalPERS to correct the error.

The mix-up may be related to the fact that CalPERS requested information in two waves; one of which used outside firm Steptoe & Johnson. A CalPERS spokesman said that, in one instance, the PE firm submitted its form to Steptoe & Johnson but not to CalPERS. The pension fund is looking into the other cases, he said.

For background, all of this is part of CalPERS trying for a little transparency while it’s former board member Alfred Villalobos is under SEC investigation for possible pay-to-play dealings connected to Elliot Broidy and Markstone Group.

So even though the forms were voluntary, it’s logical that general partners would want to quickly clear their names of any wrongdoing by complying immediately — and the vast majority of them did so. (Remember the hundreds of files we posted?)

But eight PE/VC firms did not, according to CalPERS. They are: EnerTech Capital, Fenway Partners, GTCR, Information Technology Ventures, Markstone Capital, Pinnacle Ventures, Ripplewood and TSG Capital.

I’ve called all of them to find out why and found out that many of them fall under two categories: CalPERS made a mistake, or they are old as dirt. I’ve got details on all of the funds, including the vintage, returns, and comments from the firms, below.

Update: CalPERS released the following statement:

EnerTech Capital was placed on the list in error.  They did respond and attached are the disclosures. As a further update, Fenway, Ripplewood, GTCR and Pinnacle Ventures contacted us today and indicated that they will be responding.  We will pass along those disclosures as we receive them.

EnerTech Capital
EnerTech Capital Partners III, L.P.
Year: 2008
Fund Size: $88 million
Type: Venture Capital
Comment from Tucker Twitmyer, Managing Director: “We have a terrific relationship with CalPERS. We did comply with the request and submitted a complete response on Jan. 29 and provided an electronic copy on the same day. Since I first learned of this, I’m anxious to find out why we were included, because we have copies of the emails. We take it very seriously and hope to get a retraction issued very soon.”

Fenway Partners
Fenway Partners Capital Fund, L.P.
Year: 1996
Fund Size: $527.3 million
Type: Buyout
CalPERS Investment: $100 million
Amount Drawn: $98.6 million
Return: 1x
IRR: 0.20%
Comment from Peter Lamm, Co-Founder and Managing Partner: “CalPERS has gotten back to us and confirmed that we cooperated with all of the requests. Calpers invested in our first two funds and we didn’t use a placement agent. We responded to their request for information.

Golder Thoma & Cressey Fund IV, L.P.
Year: 1993
Fund Size: 312 million
IRR: 24.94%
Type: Buyout
A GTCR spokesperson said the fund in question is in liquidation and the firm did comply with the Calpers request.

Information Technology Ventures: Information Technology Ventures II, L.P.
Firm no longer exists.

Markstone Capital
Markstone Capital Partners, LP
Year: 2005
Fund Size: $800 million
Type: VC
Return: 1.1x
IRR: 4.80%
Comment: Has not returned calls.

Pinnacle Ventures
Pinnacle Ventures II-B, L.P.
Year: 2005
Fund Size: $200 million
Type: Venture
Kenneth R. Pelowski, Founder and Managing Partner, said “We did comply and believe this was an error by Calpers. We are in the process of communicating with Calpers to rectify this mistake.”

Ripplewood Holdings
Fund: Ripplewood Partners II, L.P.
Year: 2001
Fund Size: $1.2 billion
Type: Buyout
CalPERS Investment: $50 million
Called Down: $49.7 million
Return: 1x
IRR: 1.40%
Christopher Minnetian, General Counsel, said, “We made a submission in December and they acknowledged it. They said they are in the process of figuring out how they made the mistake and will correct it.”

TSG Capital
TSG Capital Fund II, L.P.
Year: 1997
Fund Size: $225 million
Type:  Buyout
Return: 1.68x
IRR: 9.90%

TSG Capital
TSG Capital Fund III, L.P.
Year: 2000
Fund Size: $515 million
Type: Buyout
Return: 2.25x
IRR: 24.4


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