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The California Public Employeees’ Retirement System (CalPERS), the nation’s largest pension fund, in last year’s fourth quarter boosted its stake in San Diego-based Bridgeport Education by 112.4 percent, according to the company’s most recent filing with the Securities and Exchange Commission. CalPERS, which has $360 billion in assets, bought 133,159 Bridgepoint shares during the period, ending the quarter with 251,265 shares, or 0.86 percent of Bridgepoint stock. Institutional investors own 85.18 percent of the stock.

Bridgepoint is under investigation of several states and the federal government. It was studied by a United States Senate committee. One of the senators called it “an absolute scam.” The stock has been quite volatile.This raises the point of whether a pension fund — deeply underfunded — should chase after a volatile stock whose ethical problems have been well publicized. The stock has been over $30 and is now trading above $6.

CalPERS, which provides benefits for 1.6 million California public employees, retirees, and their families, is underfunded by $150 billion, with current assets at 68 percent of funds necessary to provide for its liabilities.

Pension funds have been under pressure to dump stocks of gun makers and retailers. CalSTRS, the state fund for teachers, sold off shares of gun makers after the Sandy Hook Elementary School disaster in 2013. “Over the decades, CalSTRS has divested from other industries — including tobacco and coal,” says nor.org. However, CalPERS has stuck to the position that its mission is to “Strengthen the long-term sustainability of the pension fund.” (On the other hand, another principle is to “Cultivate a risk-intelligent organization.”) I have been unable to reach the spokesperson for the fund.

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Comments

SportsFan0000 April 16, 2018 @ 5:54 p.m.

Man, what a dumb move by CalPers!... Like buying some of the last seats on the Titanic OR loading up on Stock in early 1929 or early 2008..

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Don Bauder April 16, 2018 @ 9:07 p.m.

SportsFan0000: You never know. An outfit named ledgergazette.com has done good homework on ownership of this stock. Institutional investors own 85.18 percent of the stock, according to ledgergazette.

This stock is very volatile. So if you buy cheap and sell dear, you can make money. Years ago, I wrote a column saying that while I considered the company a corrupt one, the stock might go up for technical reasons. When shorts pile up and then there is suddenly surprise good news, Bridgepoint tends to shoot up. So it can be good for speculators. CalPERS, however, should not be a gambler. Best, Don Bauder

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Visduh April 16, 2018 @ 6:59 p.m.

Yes, absolutely nuts. CALPERS was once a force for improved corporate governance, and acted to oblige a number of corporations to get their acts together. More recently the social driven agenda has had them making investment decisions on less-than-return bases. But this one takes the cake. That company appears, to me at least, to be in a death spiral. It has no redeeming value, cannot claim to be doing good for the downtrodden, and even the most liberal pundits don't like it. So where did CALPERS come up with this bizarre decision?

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Don Bauder April 16, 2018 @ 9:11 p.m.

Visduh: I called CalPERS twice on this. It never called me back. It claims its main concern is making the assets grow. But a highly speculative stock like Bridgepoint, which may not make it, might make the assets shrink. CalSTRS, the teachers pension fund, adheres to social investing policies, like not investing in gun makers and gun retailers, and not buying tobacco and coal stocks. Best, Don Bauder

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Don Bauder April 18, 2018 @ 7:40 a.m.

NOTE: A day and a half after I called CalPERS, it called me back. Best, Don Bauder

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Visduh April 18, 2018 @ 5:27 p.m.

Did they offer any answers to your questions? Anything like a justification for that strange stock purchase? Or did they just take your queries and promise to "get back to you?"

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swell April 16, 2018 @ 9:28 p.m.

When Trump was elected, the 'smart' money said for-profit schools would prosper. It hasn't quite worked out that way. Trump's own fake university hasn't fared so well either. Still to be determined is the future of public K-12 schools. Trump's hiring of billionaire Betsy DeVos as Secretary of Education puts them in jeopardy as she is well known for promoting private schools and voucher programs that leave poor kids behind.

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Don Bauder April 17, 2018 @ 10:45 a.m.

swell: Yes, I have written about that a couple of times. Bridgepoint stock shot up from about $8 to above $11 right after the election. (Don't hold me to those prices. I am going from memory.) But the stock came back down, as did the stocks of other for-profit universities. Yes, Trump and DeVos champion the for-profits, despite their obvious smelliness. Some Bridgepoint executives were named to Trump administration posts. I have written on that, too. Best, Don Bauder

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Don Bauder April 17, 2018 @ 11:03 a.m.

Mike Murphy: There has been hanky-panky at CalPERS before. Is there again? Dunno.

But I do know this: stock of Bridgepoint has always been speculative and highly volatile. Does CalPERS want such stocks in its portfolio? Best, Don Bauder

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