Dr. Pan Introduces Bill to Bring Transparency to University of California Investments
Sacramento – Dr. Richard Pan, a State Senator representing Sacramento, introduced Senate Bill 574 which would put an end to the University of California’s practice of keeping the public in the dark on two of their largest venture capital investments: Kleiner Perkins Caulfield & Byers (Kleiner Perkins) and Sequoia Capital (Sequoia).
“As a former UC professor, I care very deeply about this public institution and want it to succeed in all areas,” said Dr. Richard Pan, a pediatrician and former educator at UC Davis. “It makes no sense that the UC system would not want to know how their investments are performing and claiming ignorance is not good enough for the students, faculty and thousands of public employees whose futures depend on such investments.”
“It is incredulous that the UC claims that it does not need to know the specifics about how its investments are performing with these two investment firms,” said Jim Ewert of the California Newspaper Publishers Association, the bill’s sponsor. “At a time when the UC Regents have voted to increase student tuition to make ends meet, SB 574 would ensure that the public, the Governor and the Legislature know whether the UC is making a killing or taking it in the shorts.”
Like many other colleges and universities, the University of California makes investments, which include employee retirement, endowment, working capital, and other cash assets in a variety of Wall Street funds. According to their website, the UC investment portfolio totals approximately $91 billion.
After a battle that was fought in several courtrooms, a Court of Appeal decision in the Regents of the University of California v. Superior Court (2013) held that if the Regents choose not to obtain performance information about individual investments, the Regents can avoid the disclosure requirements of the California Public Records Act (CPRA).
While UC has provided performance information under the CPRA for their other investments, they have denied requests for two investments: Kleiner Perkins and Sequoia. The UC’s total commitments as of 2014 were $80 million for Kleiner Perkins and $107 million for Sequoia.
SB 574 would simply require that the University of California obtain performance information for their investments in Kleiner Perkins and Sequoia, just as they do with their other investments.
The need to put this information in the public’s hands could not be more timely after a 2014 analysis by the Center for Investigative Reporting found that UC’s endowment produced the worst investment returns of the 10 richest colleges in the country over the past decade: http://cironline.org/reports/uc-endowment-has-worst-investment-returns-among-largest-us-college-funds-5929.
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