(February 7, 2013) – The University of California’s $71.7 billion endowment and pension fund must make public more details of its investment performance, an Alameda County judge has ordered.
The university does not publish full allocation and return data on its investments in Sequoia Capital or Kleiner Perkins Caufield & Byers [KPCB], in contrast with most of its other venture capital investments. In January, Reuters America sued the university system’s governing body over this lack of disclosure, alleging that it violates California’s Public Records Act.
“The public has a strong interest in disclosure not just of the ‘aggregate’ performance of venture capital funds like Kleiner Perkins and Sequoia, but each ‘alterative investment vehicle,’” Reuters’ attorneys argued in its petition. “Both the public whose tax dollars pay for UC’s (University of California) investments, and other funds whose information is subject to disclosure are disserved by the special and disparate treatment UC has granted Kleiner Perkins and Sequoia.”
Prior to the lawsuit, UC’s public records office had refused Reuters’ request for unpublished performance data in a September 2011 letter, stating that “the Treasurer’s Office does not receive information from KPCB … [or] Sequoia Capital on an individualized fund basis.”
The university’s governing body, the Regents, reiterated its lack of data in its response to the complaint. Furthermore, the UC’s attorneys argued that Reuters has no legal claim to the information, and cast doubts on the company’s stated motives: “Stripped of all legal authority—because there is none—Reuters America’s argument boils down to a highfalutin pitch about why, in the public interest, the Regents should be—not is—required to obtain financial information from KPCB, Sequoia Capital, and others, and then release it to Reuters America.”
Thomson Reuters Corp. operates both the media company at hand and a leading financial data service. The defendants’ response suggested that business interests were a factor in the company’s pursuit of the data. Reuters, the filing continued, “is interested in drawing eyeballs and clicks of securities traders, and selling ad space to those who wish to market to those traders, not the public interest of California taxpayers, or the Regantal employees and retirees whose pension funds are invested in alternative asset vehicles.”
The University of California’s Office of the President declined to comment on the decision, but did confirm that it will not have to publish the investment data immediately. According to a spokesperson, the court issued a stay on further action until March 11.
The case is number RG12613664, in the Superior Court in the State of California, County of Alameda.