BILL ANALYSIS
AB 1913
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Date of Hearing: May 12, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1913 (Davis) - As Amended: April 22, 2010
Policy Committee: P.E.R. &
S.S.Vote: 4-2
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires the CalSTRS and CalPERS boards to report
annually to the Legislature on the ethnicity and gender of
emerging investment managers participating in the funds'
management contracts. Specifically, the bill:
1)Requires the boards to prepare the reports annually on or
before January 1, 2012 through January 1, 2016.
2)Requires the report to (a) identify the investment firm,
ownership composition, the portfolio value, investment
classes, and ethnic and gender breakdowns the firm's owners
and officers, and (b) include strategies to increase the
participation of emerging investment managers until they
manage at least 10% of the board's actively managed portfolio.
3)Defines "emerging investment manager" to mean a qualified
investment adviser who is a woman or a member of a minority
group and who managers an investment portfolio of between $10
million and $1 billion of the board's actively managed
portfolio.
FISCAL EFFECT
Annual costs to collect data and prepare reports of about
$15,000 for CalSTRS and $20,000 for CalPERS.
COMMENTS
1)Purpose . The bill is intended to raise participation of women-
and minority-owned businesses in pension fund asset
AB 1913
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management. According to the sponsor, "As the nation's leader
in attracting private equity capital and advancing innovation,
California should also be the leader in encouraging equal
opportunity in our state pension fund utilization of emerging
investment managers.
2)Background. California's two largest pension funds - CalPERS
and CalSTRS - have combined assets about $340 billion. About
one-half of these assets managed internally by investment
staff and the other half are placed with outside managers.
Emerging investment managers generally refer to smaller or
newly emerging companies that provide investment services to
pension funds. CalPERS and CalPERS provide access to a
database of about 721 such firms, which consist of money
managers, followed by hedge funds, private equity funds, and
broker-dealers.
Analysis Prepared by : Brad Williams / APPR. / (916) 319-2081