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The California Public Employees' Retirement System in Sacramento, California. The fund may severely cut back its venture capital investments.
CalPERS, the gigantic California public workers' pension fund, has announced that it's going to to review the venture-capital component of alternative investments in its $230-billion overall portfolio. This follows on the heels of a much-discussed paper put out by the Kauffman Foundation earlier this year, in which the organization — which is devoted to promoting entrepreneurship — revealed that its VC investments has seriously underperformed in the past decade.
I wrote a feature about this in May. In January, CalPERS announced that it made only a 1.1-percent return on its investments, missing its target return of 7.75 percent by a wide margin. One of the reasons it in alternative asset classes like VC in the first place is that it can't meet its return objectives otherwise.
The fundraising aspect of being a VC has gotten pretty challenging. Some VCs seem to be adapting to this "new normal," while others appear content to live at the top of the pile and uses their brand-name status to vacuum up most of the available money. But they all rely on large funds like CalPERS to fuel their efforts to find the next Google or Facebook.
Leo Fender gifted this Fender guitar to Les Paul in 1951. The legendary guitar maker has just priced its IPO.
Fender, the legendary guitar maker — around since the 1940s! — filed for an IPO earlier this year and has now priced the offering: between $13 and $15 per share. The company will raise about $160 million, says the LA Times. This is actually less than the company expected to raise when it filed back in March and could reflect an overall pullback in the IPO market, after Facebook's disappointing debut.
The goal for Fender remains the same: pay off debt. It has $246 million, and according to Businessweek, it wants to shed half of that. Boston-based Weston Presidio owns 43 percent of Fender and will see a $50 million payday from the IPO:
Analysts would ordinarily be skeptical of a company that’s going public to help balance its books. Investors prefer companies with clear plans to expand; they don’t usually want to help pay for acquisitions and debts already undertaken. But Fender has something going for it that very few others possess: It’s an iconic brand people truly love.
Listen in above to my weekly business and economy segment on "America Now with Andy Dean." Last Friday — Friday the 13th, no less! — Andy and I wrangled over some his favorite topics and a few of mine. Talking about the extra days that taxpayers will have to file this year yielded some lively banter about Mitt Romney and a set-up to talk about the Buffett Rule and capital gains.
A bit later, Andy was able to vent about public-sector pensions and unions, while I was able to make the point that...he's a got a point, and that we're going to have to develop new ways to administer these benefits, given that big pension funds, like Calpers in California, aren't going to be able to meet the 7-8 percent targets for returns on investments.
We even got to spend some time discussing Google's stock split, which is either moderately evil or sort of desperate, depending on your point of view. And by the way, I agree with Andy that YouTube's lack of "conservative" channels in a new roll-out is a problem (Google owns YouTube). Conservatives provide great entertainment and it's a miss for YouTube to fail to include them, if that's YouTube's intention.
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A pedestrian walks by an H & R Block office on April 15, 2011 in San Francisco, California. Despite having an extra three days to file your income taxes this year, an estimated 15 to 20 million people will wait to the very last minute to file their taxes with a high number relying on tax preparation services.
Taxpayers are getting a bit more time this year to file their federal income tax returns. It's Emancipation Day in the District of Columbia today — that's the day the slaves were freed in D.C. — so federal offices, including the IRS, are closed. And because April 15 fell on a Sunday, the government has to give taxpayers an extra day. So this year, Tax Day will be Tuesday, April 17.
That's tomorrow! If you haven't done your taxes yet, don't freak out. There's till time and it's not as big a hassle as you might think. You just need to use technology.
I'm old enough to have filed 1040-EZ forms by hand and both 1040 short and long forms, with a variety of schedules, also by hand. In the mid-1990s, I obtained the services of an accountant and we enjoyed a happy collaboration for around 15 years. But then I decided to go back to doing my taxes myself, mainly because I was bumping up against the deadline and didn't think I'd have time to get everything ready for my tax guy, but also because I was curious about tax-preparation software.
A couple of weeks ago, Guggenheim Partners was an under-the-radar funding source for Magic Johnson and Stan Kasten's successful marquee campaign to buy the L.A Dodgers. Just a $125-billion private firm in a world of much bigger fish. Goldman Sachs has almost a trillion in assets under management. Morgan Stanley has over $800 billion. Guggenheim hangs out in much lower reaches, with other broker-dealers in the realms below the exalted heights of major Wall Street investment banks.
Under CEO Mark Walter, however, Guggenheim is moving aggressively to break out of this mold and distance itself from shops like MF Global, the bankrupt broker-dealer that former Goldman CEO Jon Corzine was trying to bring into the big leagues — before a failed bet on European debt and some possibly illegal maneuvers with client money sent the firm into bankruptcy (and could send Corzine to jail).