Crowdfunding’s a popular topic here at BLPB, but here’s a use that hadn’t occurred to me.

Apparently, a former SEC lawyer is using Kickstarter to fund an investigation into the fees that CalPERS pays for its private equity investments.   

It all started when CalPERS announced that it didn’t know what it was paying in private equity fees.

This was somewhat surprising.  CalPERS has the money, and is assumed to have the sophistication, to bargain for its interests and at least require firms to make the appropriate disclosures.

Nonetheless, it appeared to be in the dark about its own fee payments.

To be fair, NYC’s Comptroller recently claimed to be shocked by NYC funds’ fees, and the SEC has now begun to aggressively investigate private equity fee and expense disclosure.  It even recently settled a case with KKR alleging that it improperly allocated expenses to fund investors that it should have partially absorbed itself.

 Still, one would have thought that CalPERS, of all funds, could protect itself.

Enter Edward A. H. Siedle, who is seeking public support for his investigation of CalPERS’s fees.  Apparently, he’s done this before: he recently issued a crowd-funded report on Rhode Island’s state pension fund, concluding that the fund experienced $2 billion in “preventable losses.”

I’m not sure what the broader lesson is here, but there are certainly plenty of candidates – the versatility of crowdfunding?  The dysfunctions of public pension funds generally, or CalPERS specifically?  The opacity of private equity?  The problems inherent in the SEC’s assumption that assets correlate with sophistication?   Or maybe it’s a just a story about the decline of local reporting, because honestly, these are the kinds of stories we might once have expected to be covered by local news outlets.  Does the “sharing economy” mean we have to “share” public goods like news reporting? 

Apparently so.

In any event – happy 4th of July!  Have a classic depiction of patriotism in celebration: