I’ll be signing off until 2015. In the meantime, here’s some news and research for your vacation reading enjoyment.

First, the news:

- Discrimination: Private equity is a giant boys’ club. The stats are shameful.

- The Fee Machine: CalPERS has 684 PE funds with 390 GPs. Yes, that’s absolutely crazy. Apparently the public pension fund enjoys paying alpha fees for beta exposure to the asset class.

- Governance: Norway’s SWF is revamping the governance of its ethical investing policies. And it’s about time they did so.

- Brace! Brace! S&P says there is 50% chance that Russia will be downgraded to junk in the next 90 days. If this happens, Russia will be forced to make significant draw downs from its various sovereign wealth funds.

- Green & Blue: OTPP and PSP are jointly acquiring a a portfolio of renewable energy and water infrastructure assets worth $2 billion.

- Mixed Messages: The CEO of Bahrain’s Mumtalakat is confident about his fund’s prospects and, as such, is looking around the world for “investment opportunities that play to our points of strength.” Meanwhile, Fitch just cut Mumtalakat’s outlook to negative.

- Deal Flow: Singapore’s GIC is reportedly part of the syndicate of investors putting more than $1 billion into Xiaomi.

- Backyard: Oman is a country with a sovereign fund that looks almost exclusively at domestic opportunities (i.e., Oman Investment Fund). And yet, the Omani sovereign fund that has for mandate to focus on international opportunities (i.e., the State General Reserve Fund) is now boosting its domestic investments. Curious development...

- Lobbying: CalPERS announced it is shuffling its stable of lobbyists in DC. In my view, more pensions should be hiring lobbyists to push their state legislatures for better pension fund governance, as changing the public pension governance is often a legislative matter. This would be well worth the expense. As the governance improved many other positive changes would trickle down into the organization, such as more competitive compensation and hiring practices, which would minimize fees paid to Wall Street, improve returns and so on. But the existing boards would have to agree to such a policy of lobbying, which could mean that the current boards would lose their power, so it probably won’t happen... Unless, that is, we created a Rebel Alliance Lobby Group of our own funded by third parties to push for pension governance reform. Let’s noodle on this.

Second, here’s some research of interest:

- The Fee Machine: Andrew Clare, Nick Motson, Richard Payne and Steve Thomas have an interesting new paper entitled, “Heads We Win, Tails You Lose. Why Don’t More Fund Managers Offer Symmetric Performance Fees?” Here’s a blurb to show you how misaligned our investment industry has become: “Our study identifies a clear ‘incentive mismatch’ between the best interests of investors and managers, more specifically, there is no single structure that simultaneously maximises[sic] both the investors’ and the managers’ utility. In fact, the results show that the most prevalent fee structure currently in the UK market (a fixed fee as a proportion of AUM) is generally the best structure for the manager and the worst for the investor!” Sigh.

- Hippy Alpha: Gordon L. Clark, Andreas Feiner and Michael Viehs have a new paper entitled, “From the Stockholder to the Stakeholder: How Sustainability Can Drive Financial Outperformance.” The authors show that robust sustainability processes among portfolio companies do in fact drive investment outperformance. It pays to be green.

- Private Equity: Gregg D. Polsky has a new paper entitled, “A Compendium of Private Equity Tax Games.” The paper describes and analyzes the tax strategies, lawful and unlawful, used by private equity firms to minimize taxes.

Have a wonderful Holiday Season!