Soh Yun Park, founder of the Youstar Foundation's warmline hopes to break the stigma among the Korean speaking community when it comes to talking about mental health.
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Courtesy of Soh Yun Park
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Topline:
Soh Yun Park wants the Korean community to know that she’s listening. Or more importantly, there are nearly 70 volunteer counselors, the majority who speak Korean, who are available to talk with them. Last year, she founded with her husband a phone line primarily focused on helping the Korean-speaking community during mental health challenges in their lives.
Why now: She and her husband, Sang Kyun Park, founded the Youstar Foundation’s warmline, one step below the type of hotline that’s called during an emergency, in a means to reach the community that is experiencing high rates of suicides and a stigma in asking for help.
Why it matters: The thrust of the Youstar Foundation’s warmline is to reduce that stigma around mental health and address the generational struggle in seeking support. Whereas most warmlines offer mental health support for diverse groups of people, this warmline offers a free emotional support telephone service for Korean Americans.
Soh Yun Park wants the Korean community to know that she’s listening. Or more importantly, there are nearly 70 volunteer counselors, the majority who speak Korean, who are available to talk with them.
Last year, she founded with her husband a phone line primarily focused on helping the Korean-speaking community during mental health challenges in their lives.
The organization is based in Koreatown, but its reach goes beyond the neigborhood.
“Hearing such heavy stories makes my heart ache,” she said. ”But it’s an honor to be the ears that listen.”
She and her husband, Sang Kyun Park, founded the Youstar Foundation’s warmline, one step below the type of hotline that’s called during an emergency, in a means to reach the community that is experiencing high rates of suicides and a stigma in asking for help.
The thrust of the Youstar Foundation’s warmline is to reduce that stigma around mental health and address the generational struggle in seeking support. Whereas most warmlines offer mental health support for diverse groups of people, this warmline offers a free emotional support telephone service for Korean Americans.
QPR (Question, Persuade, Refer) training for suicide prevention, organized by YouStar Foundation.
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Photo Courtesy of Soh Yun Park
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In many ways, Soh Yun Park’s trajectory to mental health advocacy was not a straight line.
She was born and raised in South Korea and finished college before immigrating to the United States to join her family. Her background was a bit different from her current work as she originally majored in engineering, then worked as an accountant after moving to the U.S.
In 2002, Soh Yun Park met her husband who was working as a journalist at the time. In his work, Sang Kyun Park noticed people struggling from difficulties with physical health to battles with mental health. He wanted to do something to help.
In response, Sang Kyun created a magazine that advertised local community service organizations in hopes that they would reach the people who needed them.
After receiving a call from a mother whose child was diagnosed with leukemia and required a bone marrow transplant, Soh Yun and her husband decided to create the Youstar Foundation. The organization began with a mission to spread awareness about cancer.
But roughly six years after they started dating, Sang Kyun Park became ill and had a serious health crisis.
“My husband has bipolar disorder,” Soh Yun Park said. “ That’s when I realized how serious this illness was, but we didn’t fully know how to treat it.”
At the time, she searched for a pyschologist, but the language barrier was a huge hurdle.
“If you can’t communicate, it’s terrifying,” she said.
Despite Sang Kyun’s diagnosis from a young age, he was unable to find proper treatment in Korea.
“It’s hard to test different doctors when you are already in an emergency state,” Soh Yun Park said.
After 10 years of combined therapy and medication, she saw her husband improve and the effects that therapy can have on someone in a crisis situation. She wanted to help others do the same.
That’s when the couple shifted their organization’s mission to helping the Korean community talk about their mental health struggles.
But Soh Yun Park understood the stigma of getting mental health care in the Korean community.
“They hide it, which prevents them from getting help,” she said “This leaves not just the individual, but the whole family hiding in darkness.”
The warmline was meant to serve as the first step in getting out of the shadows.
Out of all Asian groups in Los Angeles County, Koreans were found to have the highest rate of suicide, according to the latest available data.
Park shares her experience in organizing healing seminars for Korean Angelenos.
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Courtesy of Soh Yun Park
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For a city like Los Angeles where more than half of the population are immigrants, the warmline reduces barriers for Korean American immigrants by operating in two languages, Korean and English.
Cheryl Eskin, licensed marriage and family therapist and senior director of the teen hotline program, Teen Line, said these types of resources often go unnoticed among the people who need them the most.
“These resources are staffed by kind, compassionate people who are ready to listen and support without judgement,” Eskin said.
The worry about being judgme keeps many people from asking for the very help they need, she said.
“Cultural and societal factors often come into play with people believing that their problems are not worthy of support or reveal that something is ‘wrong’ with them,” Eskin added.
Park’s work with the Youstar Foundation aims to address this type of barrier.
The line emphasizes the benefits of having counselors who share the same cultural background as their callers, who can relate to parent behaviors and generational hardships specific to the Korean community.
YouStar Foundation’s warmline can be reached at 213-221-2813. Visit YouStar Foundation’s website for more info on their resources. Available from 8 a.m. to 9 p.m. The foundation hopes to expand the program to 24-hours within the next three years.
If you or someone else requires mental health support, call the 24/7 LACDMH Help Line at 1-800-854-7771 or call/text 988 to reach the national Suicide & Crisis Lifeline.
This story was produced under The LA Local’s Youth Journalism Program. To learn more or to get involved, click here.
Cato Hernández
covers important issues that affect the everyday lives of Southern Californians.
Published July 13, 2026 4:14 PM
California's mobile ID program is expanding after Gov. Gavin Newsom signed a new law.
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Courtesy California DMV
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Topline:
Gov. Gavin Newsom has signed a new law that expands the state's mobile ID program to more than half of licensed drivers, according to his office.
What's new: The pilot program has been around for a few years, but it was limited to only a fraction of Californians. Now, 60% of drivers and state ID-holders can access a mobile version of their cards.
How it works: You store your ID on your phone through the California DMV Wallet app, and it can be added to certain phone wallets.
Keep reading... for how to join and where you can use it.
Gov. Gavin Newsom has signed a new law that expands the state's mobile ID program to 60% of licensed drivers, his office announced Monday.
For the last few years, participating residents have been able to use the state-issued mobile app and store their IDs in certain phone wallets as part of a pilot program.
Where you can use it
The program works for driver's licenses and state IDs.
The mobile version is mainly valid at airport security, but use is expected to expand in the future.
One big caveat: Mobile IDs are not accepted by law enforcement or most state government agencies.
That means you should still keep your physical ID or license with you, especially if you're driving. You can find a full list of accepted places on the DMV's website.
How you can apply
Access to the program was previously capped to 4.2 million drivers — now that's quadrupled to over 16 million.
You can join the pilot by downloading the CA DMV Wallet app from your phone's app store and logging into your MyDMV account.
You'll need to provide your driver's license or ID card information. The app will prompt you to scan your card, and you'll have to refresh the mobile ID every 30 days.
More than 3.5 million Californians have joined so far.
The Housing Choice Voucher program — also known as Section 8 — is supposed to give participants a chance to live where they choose, including in communities like Santa Monica, one of the Los Angeles area’s most desirable places to live. But in more than two-thirds of Los Angeles County, voucher holders live in areas the state considers “low resource” according to a Capital & Main analysis of data.
Santa Monica is an outlier: Six of the 20 L.A. County census tracts with the most voucher holders also rank among the county’s highest in rates of poverty and racial segregation. Of the 20 L.A. County tracts with the most voucher holders, the tract that includes downtown Santa Monica is the only one that state housing officials categorize as “high-resource,” based on measures such as income, employment and high school graduation rates, Capital & Main’s analysis found.
Why it matters: Just one in five voucher holders in L.A. County live in a census tract that the state ranks as either “high” or “highest resource.” California considers areas “high resource” based on factors like home values and its residents’ incomes and educational attainment. Martha Galvez, executive director of the Housing Solutions Lab at New York University’s Furman Center, says that "living in a high resource, low poverty neighborhood is really good — especially for kids for long-term life outcomes.”
At the Sea Castle apartments, just steps from the beach in Santa Monica, a small one-bedroom with an ocean view starts at $2,900 per month. But some tenants pay only about 30% of their income, and use Section 8 housing vouchers or other government subsidies to cover the rest.
Moving in was life-changing for Lorenna Taylor, 55. “It took me a week to get up my nerve to come here and apply,” she said, wearing bike shorts and an animal-rights T-shirt outside the eight-story beachfront building that’s a short walk from Santa Monica Pier.
Taylor moved here about a year ago from a nonprofit-run affordable apartment building in the city that was “nasty” and, she said, management “treated us badly.” But she found a warm welcome at the Sea Castle. Now, she said, “I’m able to live the life I want to live. I’m handling stress better.”
The Housing Choice Voucher program — also known as Section 8 — helps 2.4 million households nationwide who can’t afford market rents to stay housed. It is supposed to give participants a chance to live where they choose, including in communities like Santa Monica, one of the Los Angeles area’s most desirable places to live not only for its sea air and ocean views, but because of the city’s high-achieving schools and plentiful parks and libraries.
But in Los Angeles County, relatively few voucher holders enjoy those amenities. More than two-thirds of Los Angeles County voucher holders live in areas the state considers “low resource,” according to a Capital & Main analysis of data from the U.S. Department of Housing and Urban Development, California state housing agencies and the U.S. Census Bureau. Six of the 20 L.A. County census tracts with the most voucher holders also rank among the county’s highest in rates of poverty and racial segregation.
Santa Monica is an outlier in the county, the analysis showed. All of the census tracts in the city, which is home to more than 1,500 voucher holders, are considered “high resource.” Higher resource tracts have higher home values, households with higher incomes and better academic outcomes compared to the rest of the state.
In response to Capital & Main’s findings, California Civil Rights Department spokesperson Rishi Khalsa said his department, which enforces anti-housing discrimination law, “is always interested in identifying any additional potential pattern in discrimination.” Such discrimination “can certainly be one of many factors that might contribute to a higher concentration of voucher holders in low opportunity neighborhoods.”
Marcie Vega, director of Assisted Housing Programs for the Housing Authority of the City of Los Angeles, noted that “even with a voucher, low-income renters are competing for a very limited number of available homes.”
Discrimination is also a factor despite laws in California, the District of Columbia and 23 other states that make it illegal for landlords to reject tenants because they rely on housing assistance. A recent Capital & Main investigation found that some of the county’s largest landlords avoid Section 8 renters.
Sea Castle, where low-income tenants live side by side with affluent neighbors, is an example of the program working as intended.
Sea Castle resident Tom Lang and his disabled dog Karma outside his Santa Monica apartment building.
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Jeremy Lindenfeld
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Capital & Main
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One reason the Section 8 program works well in Santa Monica may be the city’s immediate response to suspected discrimination. Romy Ganschow, a chief deputy city attorney who oversees the program, said that an attorney contacts the landlord — often within a day of receiving a discrimination report — to explain the law and the city’s determination to enforce it.
“By the time the tenant files a lawsuit or gets the authorities involved the unit’s going to be given away to somebody else,” Ganschow said. Indeed, the state Civil Rights Department, which takes most such complaints, can take more than a year to resolve them. The city’s rapid response turned some 40 refusals to rent into offers to lease between 2015 and 2024, Ganschow said.
Santa Monica’s enforcement system is “extremely unique,” said Michelle Uzeta, executive director of the Berkeley-based Disability Rights Education and Defense Fund, which advocates for fair housing.
“There’s no other city that does anything like that in California,” Uzeta said. In 2023, she requested public records from 16 cities, including Los Angeles, that had passed local laws prohibiting discrimination against tenants with housing assistance. She asked them to provide data on enforcement efforts and describe them.
“Only one of the municipalities contacted — the City of Santa Monica — had taken any affirmative enforcement action to enforce the source of income protections in their local ordinances,” Uzeta said in an email.
“For people to be able to use their Section 8 vouchers is a major solution to our homelessness crisis,” Ganschow added, noting that housing discrimination is “rampant in areas that don’t have this level of enforcement.”
Getting into Sea Castle was that kind of solution for 56-year-old Tom Lang, who was homeless and living on the beach 16 years ago. He had a Section 8 voucher but he thought his chance of moving in was almost nil.
“I walked in just to stink up the lobby,” he joked.
At that time, Lang said he had just one more day to find an apartment before his Section 8 voucher expired. Voucher holders usually have between two and six months, or they lose their eligibility — and Lang’s was nearly up.
“You got a Section 8 opening for a bum like me?” he recalled asking a building manager. His timing was right, and the manager said yes.
Lang doesn’t owe his luck to city enforcement; Santa Monica approved its law prohibiting discrimination against housing voucher holders five years after he moved in. But he is pleased with the apartment he shares with Karma, his 15-year-old poodle mix who uses only her front legs and a wheeled contraption to get around. As Lang sat outside the building, several of his neighbors waved or stopped to chat.
“They love me,” he said. “I’m not crazy and everybody likes my dog.”
Sea Castle tenant Colin Chen was heading home on a recent weekday morning with a canvas Trader Joe’s bag full of groceries slung over his shoulder. He said he had learned from casual conversation in the building that some of his neighbors pay rent with government subsidies.
“We all just commingle,” he said.
Not everyone is so accepting. One tenant grumbled about neighbors who don’t work.
In California, fair housing laws are mostly enforced at the state level by the Civil Rights Department. But its resources are stretched thin. One attorney and three investigators enforce laws that bar discrimination against people who use government housing assistance. Resolving complaints can take a year or more. Spokesperson Rishi Khalsa said the department has an online portal where members of the public can report discriminatory ads, like those that say “No Section 8.” The department also holds regular educational webinars for landlords and tenants on a range of civil rights issues.
“When people do report, our department reviews it and sends a notice to the entity to remind them of their legal obligations,” Khalsa wrote in an email.
Local fair housing enforcement is likely one reason that affluent downtown Santa Monica where the Sea Castle is located ranks 12th among L.A. County census tracts with the highest voucher holder populations in the county. Census tracts are small geographic areas of 1,200 to 8,000 people that researchers use to study demographic trends and socioeconomic disparities. Of the 20 L.A. County tracts with the most voucher holders, the tract that includes downtown Santa Monica is the only one that state housing officials categorize as “high-resource,” based on measures such as income, employment and high school graduation rates, Capital & Main’s analysis found.
Wesley Wellman, a founder of ACTION Apartment Association Inc., a Santa Monica landlord group that has often been at odds with the city’s pro-renter policies, praised the city’s fair housing enforcement as “a constructive approach to attempt to resolve discrimination complaints as soon as they arise rather than just defaulting to litigation.”
In the city of Los Angeles, where affordable housing is also a top issue, Ivor Pine, a city attorney’s office spokesperson, said in an email that the office “takes the issue of fair housing and the prevention of housing discrimination for all tenants — including those relying on government subsidies — very seriously.”
Pine didn’t answer Capital & Main’s question about whether the city attorney’s office had considered a more active approach to enforcement, like Santa Monica’s. He noted that the office had sent cease-and-desist letters to landlords whose advertisements said they don’t accept Section 8 tenants, but didn’t respond to follow-up questions about how many such letters were sent, when they were sent and what the results were.
In fact, most Section 8 tenants who want to live in more affluent areas of L.A. County lack the backing that Santa Monica tenants have.
When Jennifer St. Jude planned to move from the remote high desert city of Lancaster — 80 miles north of downtown LA — to a neighborhood where she and her two adult daughters could more easily access services for their disabilities, she said it was almost impossible to find a landlord who would accept her Section 8 voucher. The search was even harder, she said, because many landlords charged higher rents than the Los Angeles County Development Authority, the county’s housing authority, was willing to pay.
“You can’t get a house or an apartment or anything, anywhere outside of low income areas,” said St. Jude, who is a graduate student in social work at the University of Southern California. “It was like, nope, nope, nope, nope.”
Just one in five voucher holders in L.A. County live in a census tract that the state ranks as either “high” or “highest resource.”
“Living in a high resource, low poverty neighborhood is really good — especially for kids for long-term life outcomes,” said Martha Galvez, executive director of the Housing Solutions Lab at New York University’s Furman Center, whose research backs up her view.
The Housing Authority of the City of Los Angeles is part of a national Community Choice Demonstration project to help voucher holders move to more affluent areas. The few hundred L.A. families who participate are given a coach, move-in expenses and housing search assistance. The Los Angeles housing authority is also among several that offer higher rent ceilings in more expensive ZIP codes to give voucher holders a better shot at living in those areas. Last year, however, the rent ceilings were lowered because of a budget shortfall, and the agency stopped issuing new vouchers to the more than 24,000 people on its already yearslong waiting list. In June, HACLA spokesperson Courtney Harris told Capital & Main that the budget picture has improved, but wouldn’t comment on whether rent payment limits would increase or whether the agency would resume issuing new vouchers.
Funding is also uncertain as Congress considers next year’s Department of Housing and Urban Development budget. The National Association of Housing and Redevelopment Officials has raised concerns that House budget proposals would not cover rising Section 8 program costs.
In mid-2024, after an 18-month search, Jennifer St. Jude finally found a house in Castaic, a northern L.A. County suburb the state considers “high resource” based on factors like home values and its residents’ incomes and educational attainment. She and her daughters finally began receiving the support services they needed.
“It was grueling to get to this place, and my heart breaks for all the people that will never be able to fight that battle and get a house,” she said.
Back in Santa Monica, Lorenna Taylor said that her new apartment is “amazing because when you’ve been beat down so long, it’s hard to accept that this can be possible.” Gesturing toward the ocean, she said, “I come out here and I can just let it all go.”
Derek Thomas of Thomas Data Consulting supported the analysis and created the data visualizations for this story.
Copyright Capital & Main 2026.
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Lucas Brady Woods
covers the weather and disasters, among other climate and science topics.
Published July 13, 2026 3:16 PM
A woman at Echo Park Lake shades herself with an umbrella last week. You might need one of those yourself — for shade and light rain this week.
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Justin Sullivan
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Getty Images
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Topline:
The National Weather Service says temperatures could rise to dangerous levels this week, with humidity making it hard to cool off.
The details: Interior valleys and mountains could see temperatures in the triple digits, with some places approaching 110 degrees. Inland coastal areas in L.A. County, including downtown Los Angeles, and Orange County are expected to hover in the upper 90s. Beaches will be mostly in the 80s. The highest temperatures are expected Wednesday.
The humidity: The increased humidity will exacerbate the heat and make it more difficult to cool off. It will also keep temperatures warm overnight.
Read on … to learn more about why it’s so humid and what risks we face in a heat wave.
The heat is piling on Southern California this week, with temperatures rising to potentially dangerous levels over the next few days.
The National Weather Service issued an extreme heat warning for much of the region that will be in effect from Tuesday at 10 a.m. to Thursday at 8 p.m. Forecasters expect temperatures to peak on Wednesday.
L.A. County: Interior valleys and mountains could see temperatures in the triple digits, with some places approaching 110 degrees. Inland coastal areas, including downtown L.A., are expected to hover in the upper 90s. Beaches will be mostly in the upper 80s but could hit 90 degrees.
Orange County: Inland areas will be mostly in the 90s, but could reach 100 degrees in places. O.C. beaches are expected to stay a bit cooler, around 80 degrees.
The Inland Empire: Much of Riverside County and San Bernardino County are likely to be over 100 degrees, with some areas reaching 110.
The Coachella Valley: Not technically under a heat warning, but highs approaching 115 degrees are expected in the desert.
The elevated temperatures are expected to pose a high risk of heat-related illnesses, especially for people over 65, young children and other sensitive populations. People who work outdoors or do not have air conditioning are also particularly at risk.
“The biggest concern is heat exhaustion or even heat stroke,” said Devin Black, meteorologist with the NWS office in Oxnard. “Best course of action is: try to stay hydrated and stay indoors as much as possible. If you have to go outside, limit your activity.”
The heat wave is also expected to exacerbate the risk of wildfires, with fire danger likely highest late in the day on Wednesday.
It also comes on the heels of a hot, muggy weekend. A heat advisory from the National Weather Service remained in place Monday after almost a week and will stay in effect until the extreme heat warning kicks in Tuesday morning.
Making sense of heat forecasts
Southern Californians are no strangers to hot weather in the summer, but heat waves are getting hotter, longer and more frequent as the climate changes.
So you should know the words forecasters use to describe these weather events — and the risks they pose.
Heat advisory: Advisories are issued when temperatures are expected to be hot enough to cause discomfort and potentially lead to heat-related illnesses, especially for more vulnerable populations like young children and the elderly.
Extreme heat watch: Watches are essentially forecasts for upcoming periods of extreme heat. Forecasters say heat watches often cover wide areas and will be revised into more focused warnings and advisories as conditions become clearer over time. Watches are a good time to prepare for extreme heat.
Extreme heat warning: Warnings are issued when heat levels are or will likely become extremely dangerous. Under extreme heat warnings, it's a good idea to avoid strenuous outdoor activity, stay hydrated and help loved ones and pets stay cool.
There’s one other reason this week is going to feel hotter, and sweatier, than usual: the humidity.
Southern Californians got a taste of it this weekend, especially if you spent time outside. The muggy air came with overcast skies and a sprinkling of rain in places.
But forecasters say the humidity will also cause the heat to build progressively throughout the week — and that it will keep temperatures warm overnight, providing little respite from the heat of the day.
Much of the recent heat has been driven by a high pressure system that has settled over the southwestern U.S. High pressure systems trap warm air beneath them and compress the air, warming it further.
At the same time, the system is currently centered to the northeast of Southern California, and as it rotates clockwise, it draws tropical moisture northward from Mexico, increasing humidity.
This monsoonal moisture is not unusual for this time of year. It's the humidity, combined with other factors — including the high pressure system, warm offshore winds and a reduced marine layer — that are driving this week’s abnormally high temperatures, according to National Weather Service meteorologists.
There is relief at the end of this hot, humid tunnel. Forecasters expect temperatures to drop back into the 80s at the end of the week, but the humidity is likely to stick around through the weekend.
Need a place to get out of the heat?
You can find cooling centers via the following links:
Don't wait until you're thirsty to drink water or electrolyte replacements.
Drink cool water, not extremely cold water (which can cause cramps).
Avoid sweetened drinks, caffeine and alcohol.
Protect pets
Never leave a pet or animal in a garage.
Never leave a pet or animal in a vehicle.
Never leave a pet or animal in the sun.
Provide shade.
Provide clean drinking water.
Protect people
Check in frequently with family, friends and neighbors. Offer assistance or rides to those who are sick or have limited access to transportation. And give extra attention to people most at risk, including:
Elderly people (65 years and older).
Infants.
Young children.
People with chronic medical conditions.
People with mental illness.
People taking certain medications (i.e.: "If your doctor generally limits the amount of fluid you drink or has you on water pills, ask how much you should drink while the weather is hot," the CDC recommends).
The state Public Employees' Retirement System (CalPERS) logo at the regional office in Sacramento.
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Rahul Lal
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CalMatters
)
Topline:
California’s largest public pension fund just had a banner year, riding a soaring stock market to record its second consecutive double-digit annual investment return.
Best year in a decade: The California Public Employees’ Retirement System announced today that it gained 14.8% on its investment portfolio in the 2025-26 financial year, more than doubling its target of 6.8%. CalPERS finished the budget year with a portfolio valued at $637.1 billion — about $80 billion more than a year ago.
Why it matters: The investment return is an important number to California government agencies because they have to cough up more money to cover losses when CalPERS comes up short. CalPERS is considered underfunded because its assets are worth less than what it owes in total to the people who earn and receive benefits through it. Its assets are now valued at 85% of what it owes to members.
California’s largest public pension fund just had a banner year, riding a soaring stock market to record its second consecutive double-digit annual investment return.
The California Public Employees’ Retirement System announced Monday that it gained 14.8% on its investment portfolio in the 2025-26 financial year, more than doubling its target of 6.8%.
CalPERS Chief Executive Officer Marcie Frost in remarks to the board described the return as the fund’s best year since 2014, excluding 2021 when markets rebounded from a crash caused by the COVID-19 pandemic in 2020.
“Our team has maintained a disciplined approach to building the health of the pension system, and our improved funded status shows this effort is paying off for our 2.4 million members,” she said in a written statement.
The investment return is an important number to California government agencies because they have to cough up more money to cover losses when CalPERS comes up short.
CalPERS is considered underfunded because its assets are worth less than what it owes in total to the people who earn and receive benefits through it. Its assets are now valued at 85% of what it owes to members.
That number is also a milestone in CalPERS’ recovery from its losses during the Great Recession. CalPERS’ assets were worth about 68% of what it owed to members a decade ago before it began a set of policy changes that effectively required government agencies and public employees to pay more toward their pensions.
What this means for union negotiations
The earnings report comes at a moment when public safety unions are urging lawmakers to boost retirement benefits for police and firefighters for the first time since former Gov. Jerry Brown scaled back retirement perks with a 2012 law. The big number could make legislators more confident in saying yes to the unions and modifying Brown’s pension reform law.
Some groups have been urging CalPERS to simplify its investment strategies in the interest of making more money faster, which would relieve some pressure on government agencies and taxpayers. That criticism came up in last year’s CalPERS election, where several unsuccessful candidates characterized the fund as underperforming.
Two former CalPERS board members now involved with an organization called the Retired Public Employees Association — Margaret Brown and J.J. Jelincic — have focused on the pension fund’s stakes in private equity, investments that sometimes include high fees and uncertain values. They supported a failed bill in the Legislature this year that would have compelled CalPERS to disclose more information about those investments.
“These are very good results, however you need to think about how you got there,” Jelincic told the CalPERS board. “You expanded high risk private equity and you moved into higher risk segments within that asset class.”
How they got here
Last year the CalPERS board adopted a so-called total portfolio approach that empowers Chief Investment Officer Stephen Gillmore to make decisions more quickly and in the interest of the overall fund rather than specific asset classes — such as private equity or real estate. The policy directs CalPERS to keep 75% of its portfolio in equities and 25% in bonds.
Frost and Gillmore view private equity as an important segment in the portfolio. The pension fund formally opposed the legislation that would have required more transparency about private equity, which the fund projected would have cost it billions of dollars in missed opportunities.
“Investing in the private markets gives us potential to earn higher returns while spreading our risk from the often volatile public stock market,” Frost told the board.
CalPERS earned a 17% return on its private equity investments last year and a 24% return on its investments in stocks. The S&P 500 climbed by 21% over that timeframe.
