CalPERS Claims Goldman Concealed SEC Probe

Mounting problems for Goldman: CalPERS claims that when Goldman applied with the fund to become a real estate investment consultant, it misled the fund about it's legal status, specifically stating that it was not "the target of a formal investigation."

(June 2, 2010) — Officials from the California Public Employees’ Retirement System (CalPERS) said they’re looking over the selection of Goldman Sachs Group in the system’s real estate pool, claiming the bank failed to disclose that it faced a Securities and Exchange Commission (SEC) probe.

“We are reaching out to Goldman for an explanation,” said CalPERS spokesperson Clark McKinley to ai5000. He said he is unaware of when CalPERS would take action on the issue.

The bank’s erroneous assurances to the largest US public pension fund in March raises questions on Goldman Sachs’ ethics policies as some question whether the bank concealed information to garner business. The bank’s assurances also raise the issue of whether the bank had an obligation to inform shareholders and potential clients of the SEC’s letter alerting the firm of likely regulatory enforcement action.

The $204 billion pension giant is claiming the Wall Street firm failed to reveal that it was the target of an SEC investigation six months after US regulators notified the bank that it would probably be charged with fraud in connection to the underwriting and marketing of a $1 billion subprime-mortgage-linked security, according to a document obtained by Reuters. The SEC filed a civil suit against Goldman over that transaction of April 16.

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According to Reuters, Goldman assured CalPERS on the bank’s March 18 application to become a real estate investment consultant to the largest US public pension fund.

Since the SEC’s lawsuit, several shareholders have filed lawsuits against Goldman Sachs, claiming investors were harmed by the firm’s reluctance to disclose the SEC notice.



To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742

Money Manager Strives to Double Japanese Pension Assets

Dutch money manager Robeco Group aims to double assets from Japanese pension funds within two years, shifting investments away from traditional asset classes such as bonds and equities.

(June 1, 2010) — Within two years, Robeco Group, the Dutch money manager owned by Rabobank Groep NV, plans to double Japanese pension assets, which have been hit by two decades of waning markets and an aging population.

As funds seek to diversify investments away from traditional asset classes such as bonds and equities, Robeco, which has about $194 billion in total assets, aims to control a portion of Japan’s more than 60 trillion yen corporate pension market.

“We think this is the time to start tapping into the market,” Tanaka said in an interview in Tokyo with Bloomberg. “Pension funds are looking for products that have low correlation with market moves as they seek to dissolve their home-biased investments and battle low interest rates.”

Tanaka said to Bloomberg that Robeco’s Tokyo unit plans to hire one to two client service professionals this year in order to satisfy growing demand from Japanese clients.

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Since it opened in Tokyo in 2005, Robeco Institutional Asset Management B.V. Japan has grown assets from Japanese pensions to 60 billion yen ($657 million), investing them in a managed futures strategy run by Robeco’s Transtrend Inc. unit, Bloomberg reported. The strategy incorporates investment in financial assets ranging from equities to livestock and has returned 7.1% this year through April.



To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742

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