Calpers Selects Desrochers to Oversee Private-Equity Investing

The California Public Employees’ Retirement System, the largest U.S. public pension, named Real Desrochers, a former Saudi Arabian Investment Co. executive, to run the fund’s $49 billion in private-equity assets.

Desrochers replaces Leon Shahinian, who stepped down in August after being named in a state lawsuit against Alfred Villalobos, a former Calpers board member turned middleman. The state claimed Villalobos improperly influenced fund investment decisions by lavishly entertaining its managers. Shahinian wasn’t accused of any wrongdoing in the case.

The $235.7 billion fund earned a return of 18.6 percent on assets in the first nine months of its fiscal year. The fund’s performance was led by gains in stocks and private equity, which produced a 17.6 percent increase, though reporting of the latter results may lag as much as four months behind other categories.

Desrochers also ran the alternative-investment program including private-equity assets for the California State Teachers’ Retirement System for a decade until he left in 2009. At Saudi Arabian, he was chief investment officer, according to a Calpers statement.

Joe Dear, Calpers’s chief investment officer, managed the private-equity assets during the search to replace Shahinian.