Investment

Calpers battles former board member over real estate investment values – Financial Times

Published

5 years ago

March 16, 2020

Calpers has refused to reveal details about valuations for real estate investments that have soured, according to a former board member who has questioned the worth of private assets held by the US public pension.

The $393bn California Public Employees’ Retirement System told its board of administration, which oversees the pension fund, in November that some older investments in non-core real estate and forestland had contributed to the underperformance of its real assets portfolio.

Calpers is due to hold a closed session on Monday at which private assets are scheduled for discussion but no disclosures are expected following the meeting.

Joseph Jelincic, a former investment officer and board member between 2010 and 2018, told the Financial Times that he believed Calpers did not want to reveal information about its private assets to avoid bonus cuts to its staff.

Mr Jelincic, a former president of the California State Employees Association, a labour trade union group, has challenged Calpers on numerous occasions over the fees it pays to Wall Street managers, resulting in a history of disputes with the pension fund.

Another person familiar with the situation said Calpers’ refusal to disclose more information was “highly problematic” because it made understanding the nature and scale of the problem impossible.

A former adviser to Calpers, who asked not to be named, said price estimates for private assets relied on assumptions based on historic trends. “All the public pension funds use assumptions that smooth valuations for private assets. It is an art, not a science.”

The adviser noted that valuations for private assets were checked by compliance and audit staff. “It seems unlikely that one team would be willing to hide the facts for the benefit of another,” he said.

Mr Jelincic initially wrote to Calpers asking it to disclose any records that either showed or warned that the market valuation for a private asset might be lower than its reported value. Calpers refused, saying California law exempts a public pension fund from the requirement to disclose records pertaining to private assets.

Mr Jelincic repeated his request in a second letter and was again rebuffed by Warren Astleford, Calpers’ assistant chief counsel. Mr Astleford said Calpers’ ability to invest in private assets would be “substantially compromised” if it broke confidentiality agreements with its external managers.

Mr Jelincic then wrote a third letter, arguing that Calpers was failing its duty to members by continuing to pay fees to external managers when the accurate value of the assets was unclear.

Calpers declined to comment to the FT.

Mr Jelincic was defeated last year in an election for a seat on the Calpers board of administration and then filed a formal protest in which he alleged that California state officials sought to influence the vote by publicising a judge’s finding in 2011 that he had sexually harassed three women while he was employed by the pension fund. Mr Jelincic has since withdrawn his protest about the election.

Let’s block ads! (Why?)

Source link

Investment

Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

Published

7 days ago

November 6, 2024

Anne Joseph

NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

Source link

Investment

S&P/TSX composite up more than 100 points, U.S. stock markets mixed

Published

4 weeks ago

October 16, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

Source link

Economy

S&P/TSX up more than 200 points, U.S. markets also higher

Published

1 month ago

October 11, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

Source link