The University of California wins battle with Thomson Reuters for the right to not disclose the investment performance of venture capital funds within its portfolio.
The University of California (UC) has won a legal battle with news provider Thomson Reuters after a California court ruled that UC was not obliged to release performance metrics of its investments into venture capital firms.
The suit, filed by Thomson Reuters subsidiary Reuters America, argued that the California Public Records Act (CPRA) required disclosure of information regarding investment returns from UC’s $11.23bn endowment fund. Specifically, the suit sought information pertaining to investment performance on funds managed by venture capital firms Kleiner Perkins Caufield & Byers (KPCB) and Sequoia Capital.
The decision overturns a lower court ruling which required UC to “make an objectively reasonable effort” to obtain the information from the two venture firms and pass the confidential financial documents over to Reuters.
The news outlet had argued that it was in public interest to see the funds’ performance, and that the university’s returns were considered public records under the CPRA. Instead, a panel of judges ruled that if the university did not have the return information, it was not obliged to obtain and disclose it.
The judges wrote: “No words in this statute suggest that the public entity has an obligation to obtain documents,” adding that unless a document is “prepared, owned, used or retained by a public entity, it is not a public record under the CPRA.”
Reuters were also orders to pay the court costs of the Regents of the University of California.
Charles Robinson, UC general counsel, said: “The university believes in, and vigorously upholds, the public’s right to know as defined by the California Public Records Act. We believe today’s decision by the Court of Appeal is the correct one. It will allow our investment professionals to make and monitor private equity investments without intrusion from third parties seeking confidential and sensitive information for their own commercial ends.”
The Reuters lawsuit stems from a request made by Mark Boslet, senior editor at the news publisher’s Venture Capital Journal, to the university for performance information regarding the KPCB and Sequoia funds.
Barb Burg, a spokeswoman for Thompson Reuters, said: “We are obviously disappointed by the court’s ruling and continue to believe the records are not only in the public interest, but should be disclosed under the California Public Records Act.”