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Treasurer Magaziner Leads Coalition of Public Pension Leaders in Pushing SEC for Greater Transparency of Private Equity Expenses

PROVIDENCE, RI Rhode Island General Treasurer Seth Magaziner announced the formation of a national coalition of public pension leaders overseeing approximately $1 trillion in assets, joining together to call on the Securities and Exchange Commission (SEC) to strengthen transparency of private equity fees and expenses.

During the announcement of his "Transparent Treasury" initiative in May, Magaziner discussed the need for stronger national standards for private equity fee and expense disclosure, and his intention to recruit other state treasurers and comptrollers to join him in sending a letter to the SEC requesting stronger standards. Today's announcement represents a successful effort by Treasurer Magaziner to recruit other leaders to join this call.

In a joint letter to SEC Chairwoman Mary Jo White sent on July 21st, state and city treasurers and comptrollers representing 13 states and cities asked the Commission to require clear and consistent disclosure of private equity fees and expenses, which are often hidden in complicated and even opaque, reporting systems. The letter also urged the SEC to require private equity firms to disclose information relating to fees and expenses quarterly, rather than on an annual basis, and called for an industry-wide standard for reporting.

The letter notes that, of the four types of private equity firm expenses, only one directly billed management fees is regularly provided to investors. The other three fund expenses, allocated incentive fees and portfolio-company charges are often reported deep in annual financial statements, and only on an annual basis.

"As fiduciaries of public funds, we must have the information necessary to give us confidence that we are not being improperly overcharged by our private equity managers," said Treasurer Magaziner. "Strong national standards for private equity fee and expense disclosure are in the best interest of workers, retirees and taxpayers in Rhode Island and nationally."

Signatories to the letter include Republicans and Democrats from across the country who oversee public funds ranging in size from $4 billion to $300 billion.

"Rhode Island may be a small state," Magaziner said, "but by recruiting other states and cities to join our call for stronger pension transparency, we can multiply our impact. I am thrilled that we have recruited the leaders of some of the largest and most impactful public pension plans in the country, with assets totaling $1 trillion, to join our effort."

In addition to today's letter, the Transparent Treasury initiative included a new policy that Rhode Island will only invest in funds that allow publication of their performance, fees, expenses and liquidity. Other aspects of the initiative are a new investment information center and data portal on the Treasury website, the publication of a transparent RFP calendar and the appointment of a Chief Transparency Officer within Treasury.

Signatories to the letter included District of Columbia Treasurer Jeffrey Barnette; California State Treasurer John Chiang; North Carolina State Treasurer Janet Cowell; New York State Comptroller Thomas P. DiNapoli; Virginia State Treasurer Mnaju Ganeriwala; Wyoming State Treasurer Mark Gordon; South Carolina State Treasurer Curtis Loftis, Jr.; Rhode Island General Treasurer Seth Magaziner; Vermont State Treasurer Beth Pearce; Nebraska State Treasurer Don Stenberg; New York City Comptroller Scott M. Stringer; Oregon State Treasurer Ted Wheeler; and Missouri State Treasurer Clint Zweifel.


Related links

  • Department or agency: Office of General Treasurer Seth Magaziner
  • Online:
  • Release date: 07-22-2015

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