Edition: July / September 2016
One of the world’s largest pension funds, and also one of the most revered for its international leadership on responsible investment, is the $290bn Californian public fund CalPERS. Its chief executive (rather, its former chief executive), Fedrico Buenrostro, has been sentenced to four and half years in prison for fraud and corruption. He admitted to having accepted more than $200 000 in bribes from a “placement agent”.
Buenrostro, who’s agreed to pay $250 000 back to the state, had given the agent access to confidential information and forged letters that helped the agent’s clients win investment business from the pension fund. The agent and his clients had collected $14m in commissions on $3bn worth of pension-fund investments.
So the hitherto pristine image of CalPERS takes a serious knock. On the other hand, it’s heartening that there are parts of the world where public officials go to jail for corruption.
On the subject of socially-responsible investment, about which so much is talked in SA, some views please from local SRI fundies on recommended practice:
Because of its high liquidity and market capitalisation, as well as its constantly superb performance and rand-hedge attractions, British American Tobacco (BAT) is a favourite in the portfolios of pension funds.
But because BAT’s fortunes turn on the promotion of tobacco, is it responsible to invest in the shares? Or is it irresponsible for trustees not to invest in them?
The Gordon Institute of Business Science has started a think-tank on ethics and governance. At its launch function in May, the GIBS auditorium was packed to hear the views of panellists Reuel Khosa, Nicky Newton-King, James Motlatsi and Mark Lamberti. Unsurprisingly, they all agreed that good ethics and good governance are good things.
Unsurprisingly also, people who didn’t need to hear their message were there in droves. Those who did need to hear it seemed not to be there at all.
At the launch, Khoza defined transformation. It means or should mean, he said, the move from a racist society to a non-racial society. (Loud applause.)
There was nobody from the other school – who prefer the more commonly-accepted meaning of blacks replacing whites – to boo.
UK prime minister David Cameron has made his tax returns available for public scrutiny.
It would be really nice, but wholly fanciful, to hope that a certain leader occupying a similar position closer home does the same.
Far be it for ordinary mortals to take a view on whether the R200m bonus that will come the way of Old Mutual chief executive Bruce Hemphill is too much, too little or just right. He’ll get it for returning the group to SA domicile and splitting it into four separate components. What predecessors Mike Levitt and Julian Roberts had done on foreign ventures, Hemphill will undo. Bonuses all round.
Can this only happen in SA?
If Donald Trump wins the US presidential election, it will be the first time in American history that a billionaire moves into public housing vacated by a black family.