Calpers investment chief Ben Meng leaves after 18 months
Calpers calls emergency board meeting after California state controller cites CIO's 'lapse of judgment and adherence to conflict-of-interest policies'
New York — The California state controller said Ben Meng’s departure from the California Public Employees’ Retirement System (Calpers) followed an unspecified “lapse in both judgment and adherence to standard conflict-of-interest policies”.
Betty Yee issued a statement on Thursday after Calpers announced the chief investment officer’s exit, citing his wish to focus on his health and family. Yee did not elaborate.
“I have called for an emergency board meeting to discuss this situation, review these policies, the CEO’s oversight and implementation of these policies, and any additional safeguards necessary to ensure this does not happen again,” said Yee.
A spokesperson for Calpers declined to comment. Meng did not return an e-mail seeking comment.
Meng’s departure, after less than two years in the role, marks the end of a volatile period for him and Calpers. During his short tenure, the pension fund produced lacklustre investment returns and Meng was targeted by accusations that he had links to the Chinese government.
Calpers reported a return of 4.7% for the 2019/2020 fiscal year, short of the annual 7% gain needed to meet its long-term liabilities for a second year running. The increase was the lowest since the 12 months ended June 30, 2016, when the fund rose 0.6%.
In the statement early on Thursday, Calpers said Meng had helped the fund beat its “benchmark of 4.3% during a time of extreme financial market volatility sparked by the coronavirus pandemic”. Later in the day, the organisation thanked Meng for his service and said he “put us on a positive path forward”.
Earlier in 2019, Meng, a US citizen who grew up in China, was accused by Republican congressman Jim Banks of being a tool for the Chinese government, funnelling American money into Chinese hands.
The allegations centred on a three-year stint Meng did from 2015 helping oversee China’s $3-trillion in currency reserves. During that time, he was deputy CIO of the State Administration of Foreign Exchange, or Safe.
Meng was hired for his job at the Chinese fund via a government recruitment plan known as the Thousand Talents Programme. That, according to Banks, probably included a lifelong mission to support Chinese authorities.
Meng rejected Banks’s claims and said his connections with Thousand Talents ended when he left Safe. He was supported by prominent Wall Street investors including Oaktree Capital founder Howard Marks and Blackstone CEO Stephen.
Calpers manages pension money for about 1-million current and former California public servants. According to its own research, it needs to alter its approach or it is likely to come up shy of its target over the long haul.
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