CalPERS chief investment officer abruptly resigns
Questions regarding conflict-of-interest disclosures preceded the abrupt resignation of CalPERS Chief Investment Officer Yu Ben Meng on Wednesday, according to the pension fund’s board members.
The California Public Employees’ Retirement System announced Meng’s immediate resignation in a late-night email after he had been on the job for less than two years.
“CalPERS has known about questions regarding Ben’s Fair Political Practices (Commission) disclosure filings,” Board President Henry Jones said in an emailed statement. “These are private personnel matters and already have been addressed according to our internal compliance protocols.”
The commission, often referred to as the FPPC, administers state laws regulating campaign finance, conflicts of interest and government ethics. CalPERS provided no further explanation as to why Meng, in whom the majority of the 13-member board has repeatedly expressed confidence, resigned after the matters had been addressed.
“We respect Ben’s decision to resign and wish him well as he focuses on his health, his family and moves on to the next chapter in his life,” Jones said in the email.
The announcement came three days after financial blogger Susan Webber published a post alleging Meng had filed incomplete and inconsistent conflict-of-interest disclosures, known as Form 700s, with the FPPC.
The forms, which CalPERS has posted online, show Meng has held investments in private equity firms and Chinese companies, two areas of investment in which his decisions have drawn scrutiny since his hiring in January 2019.
State Controller Betty
Yee, a CalPERS board member, said she was disappointed by a “lapse in both judgment and adherence to standard conflict-of-interest policies” by Meng, without providing details.
Yee said she is calling for “an emergency board meeting to discuss this situation, review these policies, (CEO Marcie Frost’s) oversight and implementation of these policies, and any additional safeguards necessary to ensure this does not happen again.”
On Thursday, the board scheduled a new closed-session meeting for Aug. 17.
The pension fund, valued at $410 billion as of Wednesday, earned 4.7% on its investments for the fiscal year that ended June 30, falling short of a 7% target as the coronavirus introduced new volatility into international markets. On average, public pension funds returned just 3.2% for the same period, the Wall Street Journal reported. It was the second year in a row in which CalPERS fell short of its target.
Meng pushed to expand the fund’s private equity investments to try to meet the 7% target, diverging from his predecessor’s approach to the riskier but potentially more lucrative investment class. He shook up the fund’s investment staff and made other strategic changes to the fund.
State Treasurer Fiona Ma praised Meng’s leadership, saying in a Thursday email that he had “set the portfolio on a better path toward a 7% solution with better and more assets” and “built a strong investment team.”
“I want to thank Ben for his contributions to CalPERS,” Ma said in her statement. “He started out by conducting a comprehensive review of the portfolio and built measures to protect it in a market crisis, which did happen. His preparations helped CalPERS greatly in navigating through the COVID19 crisis.”