Oregon Gov. Ted Kulongoski removed Diana Goldschmidt from the Oregon Investment Council (OIC) after she refused to resign.
The move comes as Oregon Attorney General Hardy Myers launches an inquiry into Goldschmidt’s vote in favor of a $300 million OIC investment into a $5 billion fund from buyout firm Texas Pacific Group.
On the day that she cast her vote-Oct. 29, 2003-Texas Pacific asked her husband, former Gov. Neil Goldschmidt, to lead the firm’s proposed $2.35 billion acquisition of Portland General Electric (PGE) from Enron Corp. The buyout was to be funded in part by Texas Pacific’s $5 billion fund, the same fund that received the $300 million investment from OIC.
The Goldschmidts have denied any knowledge that Texas Pacific was planning to ask Neil Goldschmidt to lead the PGE takeover.
The PGE offer did not become public until late November, when Neil Goldschmidt and Texas Pacific announced the deal. Neil Goldschmidt was to be chairman of the Oregon Electric Utility Co., a holding company that would own PGE. He and two other partners would each invest $830,000 in the deal. Under the plan, Texas Pacific would have the biggest stake in PGE and hold veto power over major decisions by Oregon Electric.
The deal is pending before the Oregon Public Utility Commission.
Texas Pacific issued a statement that read, in part: “No one at Texas Pacific Group had ever met or spoken with Neil Goldschmidt at any time prior to Mrs. Goldschmidt’s OIC vote on October 29, 2003. Furthermore no TPG personnel had ever spoken with Mrs. Goldschmidt about TPG’s potential interest in PGE prior to her vote on this date.”
The firm points out that the OIC has invested more than $950 million in four Texas Pacific Group funds dating back to 1993. And each of the last three OIC commitments has been worth $300 million.
Neil Goldschmidt withdrew from the PGE deal in May. That move did not put a stop to questions about the timing of last fall’s investment council vote.
CalPERS OKs New Investments
The investment committee of the California Public Employees’ Retirement System (CalPERS) authorized $306 million of new commitments to five private equity funds at its September meeting in Sacramento, Calif.
The pensioner added two buyout funds, a secondaries fund and two international private equity funds.
CalPERS invested $200 million in Hellman & Friedman Capital Partners V, a $3.5 billion fund that Hellman & Friedman, a San Francisco-based buyout shop, closed in July. CalPERS plans to invest $10 million in New York-based Leeds Weld Equity Advisors’ fourth fund. Leeds Weld Equity Partners IV had an initial close of $435 million in July.
CalPERS also committed $10 million in Connecticut-based Landmark Equity Partners’ secondaries fund. That fund held a first close in June with $515 million, and the firm expects to raise $626 million before closing the fund.
CalPERS’ investment committee allocated another $55 million to Polish Enterprise Fund V, a fund managed by Enterprise Investors that will invest in Poland and throughout Central Europe. Founded in 1990, Enterprise Investors was the first institutional private equity investor in Poland. Polish Enterprise Fund V closed in May with $367 million.
CalPERS also committed $31 million to Canada’s Richardson Financial Group. Richardson is a subsidiary of James Richardson & Sons, and the group is out raising its first private equity fund. The $250 million fund provides expansion capital to family-owned businesses in Canada.
About 5% of CalPERS’ $163.5 billion in assets are invested in private equity.