Former CalPERS Official Villalobos Denies Fraud Accusations

Alfred R. Villalobos, a former CalPERS official accused of serving as a placement agent, denied fraud accusations in a statement yesterday, saying the attorney general's suit against him was filled with significant factual errors.

(May 11, 2010) — A former board member of the $209.1 billion California Public Employees’ Retirement System (CalPERS), Alfred R. Villalobos, vows vindication after the fund’s suit alleged he and another former fund official engaged in a scheme to obtain business for investment firms, providing pension officials with luxury trips and other gifts.

While allegedly being courted by Villalobos, the suit claims that the then CalPERS CEO enjoyed $100,000 casino tabs, private jets, limousines and $200 bottles of champagne, among other lucrative gifts.

Villalobos criticized the state Attorney General Jerry Brown’s tactics in bringing the civil fraud lawsuit, according to the Los Angeles Times.

“We have cooperated with the attorney general’s office and all other federal and state regulatory agencies since we learned of this investigation,” Villalobos said in a statement, according to the LA Times. Villalobos defended both himself and his company, Arvco Capital Research, lambasting the allegations by Brown for being filled with serious and significant factual errors. However, Villalobos failed to explain the details of those errors and predicted he, his firm and Villalobos would be “completely vindicated.”

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The lawsuit, which puts another spotlight on the the rise of placement-agent activity, alleges that Villalobos, hired by private-equity firms to secure CalPERS investments, and his company, Arvco Capital Research, obtained more than $47 million in unlawful commissions for selling about $4.8 billion of securities to CalPERS from 2005 to 2009. As a so-called placement agent, Villalobos used his connections from the pension board to help forge relationships with private equity investment managers on Wall Street, helping them win billions of dollars’ worth of deals with the largest pension in the US.

The suit seeks civil penalties, disgorgement of profits and restitution to state pension fund investors of $95 million from Villalobos and business associate Federico Buenrostro Jr., a former CalPERS chief executive also sued by the state.

Brown is seeking to recover the tens of millions of dollars in placement agent commissions that Villalobos and ARVCO collected — up to $25 million in penalties and $70 million in restitution to the CalPERS fund. The attorney general also received a court order to freeze Villalobos’ assets, including two Bentley automobiles and 14 properties in multiple states, including Hawaii, the AP reported.

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

Transurban, Australia’s biggest toll road operator, plans to raise enough capital to finance its acquisition of Sydney's troubled Lane Cove Tunnel.

(May 10, 2010) — Amid a still tough market for infrastructure fundraising, Transurban Group, which owns toll-roads in Australia and the U.S, will sell shares to pay for an agreed $568.5 million purchase of Sydney’s Lane Cove Tunnel. The transaction could result in the end of a bid by two major shareholders to privatize the company.

Melbourne-based Transurban Group is subject of a takeover offer from two Canadian pension funds — the Canadian Pension Plan Investment Board and the Ontario Teachers’ Pension Plan. The two funds together own about 28% of Transurban, according to Bloomberg data. Both pensions have said they may not proceed with a revised bid if Transurban were to fund its takeover of the Lane Cove Tunnel, opened in 2007, via an equity-raising. In November, Transurban rejected the pension funds’ $6.1 billion unsolicited offer.

Yet, Transurban CEO Chris Lynch recently denied the transaction was a planned defensive move, according to The Australian. He claimed the company was pursuing “business as usual.”

“There is clear strategic value in expanding our interests on the Sydney orbital network given our existing ownership stakes in four of the assets on the network,” said Transurban CEO Chris Lynch in a statement. “Transurban is a natural owner of the Lane Cove Tunnel and we believe the asset sits extremely well within our portfolio of prime toll roads.”

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Meanwhile, Canada Pension Plan Investment Board announced the purchase of a minority ownership stake in two prime midtown commercial properties for a combined cost of $663 million, the plan’s first purchases of real estate in Manhattan.

“We remain focused on our U.S. real estate investment strategy, which is to acquire premier commercial properties in key markets,” Peter Ballon, CPPIB’s head of real estate investments in the Americas, said in a press release.

Separately, Stamford, Conn.-based Global Infrastructure Partners (GIP), the owner of London’s Gatwick and City airports, is preparing to raise a second $5-billion fund, Reuters reported. Already, GIP has invested up to $4.5 billion of its first $5.64 billion fund, focusing on energy, transport and waste assets such as ports, power stations, and waste management. Earlier this year, GIP sold stakes in Gatwick to the roughly $328 billion Abu Dhabi Investment Authority (ADIA), the world’s largest sovereign wealth fund, and to South Korea’s National Pension Service, which had 289 trillion won in assets as of March. Both investors are likely to be contacted over the new fund.

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