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CalPERS Threatens to Halt KKR Investments Over Safeway Dispute

SACRAMENTO, Calif. - The California Public Employees' Retirement System (CalPERS), the Golden State's biggest pension fund, may stop investing with Kohlberg Kravis Roberts & Co. unless the buyout firm severs its ties to Safeway, Inc., Bloomberg News reports.

With $225 million invested in two KKR funds, CalPERS says it wants New York-based KKR to focus on its buyout funds instead of spending time on Safeway, where KKR co-founder George Roberts and three other executives tied to KKR sit on the nine-member board.

CalPERS and other state pension funds are pressuring KKR to make changes at Safeway after the Pleasanton, Calif.-based chain's share value declined almost 50 percent in two years while posting $1 billion in losses since 2001.

Holding roughly 2.7 million Safeway shares, Calpers, along with pension funds leaders in Connecticut, Illinois, and New York, are attempting to force Safeway's c.e.o., Steven Burd, from the board to pave the way for more independent directors.

CalPERS is the largest public pension system in the U.S., with more than $165 billion in assets. It administers retirement and health benefits for 1.4 million state and local government employees, retirees, and their families.
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