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Regulation and Compliance > Federal Regulation > SEC

CalPERS Adds Former SEC Chair's Hedge Fund

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SACRAMENTO, Calif. (–Richard Breeden’s activist hedge fund firm has been allocated $400 million as part of the California Public Employees’ Retirement System’s corporate governance portfolio.

The $211 billion pension fund made the decision to invest in the hedge fund in a closed session during the board’s March meeting. The investment was only made public following the firm’s filing of registration documents with the U.S. Securities and Exchange Commission.

Richard C. Breeden was appointed by former President George H. W. Bush and left his post as SEC chairman in 1993. Earlier this year, he launched his hedge fund firm Breeden Capital Management. So far the strategy has $106 million, according to investment adviser registration documentation. Steven Quamme, manager of Breeden Partners, is quoted as saying that the firm already has raised $500 million, but has only invested $100 million to this point. Mr. Quamme was not immediately available for comment.

This isn’t the first hedge fund investment in CalPERS’ corporate governance portfolio, which was started in 2001. SPARX Asset Management, one of the fund’s first hedge fund investments, still retains $679.5 million of the $3.6 billion program, as of March 31.

SPARX was hired in 2002 to employ corporate governance activism against underperforming, publicly traded Japanese companies. The firm recently was named one of the largest hedge fund firms in Japan in a recent industry survey.

The idea was to collaborate with corporate management in order to increase the value of the companies. The investment vehicle is not the focus of the initiative; other managers employ a private-equity type approach.

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