investments | Pension360

Sentencing Pushed Back For Defendant in CalPERS Bribery Case

The sentencing of Fred Buenrostro, the former CalPERS executive who pleaded guilty over the summer to accepting bribes, has been pushed back nearly five months to allow further cooperation with the government.

From the Sacramento Bee:

Fred Buenrostro, who left the California Public Employees’ Retirement System in 2008, will now be sentenced May 13 in U.S. District Court in San Francisco. Buenrostro, who is free on bond, was originally scheduled for a Jan. 7 sentencing.

Buenrostro pleaded guilty in July to accepting bribes from former CalPERS board member Alfred Villalobos, a Reno businessman who earned millions in commissions securing pension fund investments for various private-equity firms. Buenrostro said he took more than $250,000 in cash, casino chips and other benefits from Villalobos, who prosecutors say was trying to gain favor for his investment clients.

As part of his guilty plea, Buenrostro agreed to testify against Villalobos, who has pleaded not guilty. Prosecutors and Villalobos’ lawyer filed a joint statement in court last week asking for the postponement “in order to permit Mr. Buenrostro’s ongoing cooperation with the government.”

Judge Charles Breyer agreed to reschedule the sentencing. Buenrostro is expected to get a five-year prison term, according to the plea agreement, although the judge will have the final say.

Villalobos, who is also free on bond, is scheduled to go to trial in February on three felony charges. If convicted, the 70-year-old Villalobos could be sentenced to up to 30 years in prison. Villalobos is a former deputy mayor of Los Angeles who served on the CalPERS board in the early 1990s.

More Pension360 coverage of the bribery scandal can be read here.

CalPERS Hires Lobbying Firms to Represent Interests Before Congress

CalPERS announced Monday it has hired two lobbying firms to represent its retirement policy and market regulation interests in front of the U.S. Congress and the Executive Branch.

From a CalPERS press release:

The joint venture between Lussier Group/Williams and Jensen was selected as [CalPERS’] federal representative for retirement policy issues, and K&L Gates was selected as its federal representative for investment and financial market regulation issues.

A third firm, a joint venture of Avenue Solutions/Jennings Policy Strategies was selected in November to represent CalPERS’ health care-related interests.

“Having specialized representatives in these areas will enable us to play a stronger role in retirement and investment national policy development that will continue to enhance the long-term sustainability and effectiveness of our programs,” said Board President Rob Feckner. “We look forward to working with both of these firms and are eager to have their skill and expertise put to work for us.”

Earlier this year, the CalPERS Board directed staff to begin the search for specialized representatives in the policy areas of health care, retirement, and investments. Three firms were selected as finalists for the retirement policy representative, while two firms were selected as finalists for the investment policy representative. After a thorough review and interview process, Lussier Group/Williams and Jensen, and K&L Gates were selected by the Board this week. The selections are contingent upon satisfactory negotiations of terms and conditions in order for the contracts to be awarded.

“Engaging nationally on retirement security issues is a priority for CalPERS and an important part of our commitment to our members,” said Anne Stausboll, CalPERS Chief Executive Officer. “Having three separate and focused representatives broadens our reach and ability to influence outcomes.”

CalPERS is the largest public pension fund in the United States with assets of about $300 billion.

Photo by rocor via Flickr CC License

Ontario Teachers’ Fund Sets Sight On Airport As It Looks To Increase Infrastructure Holdings

The Ontario Teachers’ Pension Plan is looking to expand its infrastructure holdings by up to $6 billion, or 33 percent, and the fund’s first move will likely be to buy an airport. From Reuters:

Canada’s Ontario Teachers’ Pension Plan is seeking to buy the rest of Britain’s Bristol Airport in a deal worth up to 250 million pounds ($424.6 million), a source closely monitoring the situation said on Monday.

The pension fund, which already owns 49 percent of the regional airport, has the right of first offer for the 50 percent owned by Australian asset manager Macquarie Group.

Macquarie, the world’s largest infrastructure asset manager, was sounding out buyers for its holding, British newspaper The Sunday Times reported.

Ontario Teachers’ Pension Plan is eyeing the stake as it seeks to expand its infrastructure holdings from $12 billion to around $18 billion. The deal could take place this year, the source said.

“Given the right of first offer, Ontario Teachers is likely to purchase the stake, but this will of course be based on an appropriate valuation,” the source said, adding that discussions have not commenced but are expected to start “very soon”.

European airport deals typically attract a valuation of 15-17 times core earnings (EBITDA).

The Teachers’ Plan originally invested in the airport in 2002, and it increased its stake in to 49 percent in 2009.

Bristol Airport is the ninth-busiest airport in Britain.