One of the US' biggest pension funds, the $223 billion CalPERS, has filed a lawsuit against three of the world's most powerful rating agencies to claw back some of its losses from the GFC, but local super funds look unlikely to follow suit.
CalPERS had filed a suit in a California state court in relation to $1 billion in losses that it claimed were a result of inaccurate credit ratings from Moody's, Fitch Ratings and Standard & Poor's, according to a report by Reuters.
CalPERS said the "top" ratings on highly structured investment vehicles and complex packages of securities including subprime mortgages did not properly reflect the risk of these investments.
The suit said the AAA ratings given by the agencies "proved to be wildly inaccurate and unreasonably high", according to Reuters.
Despite CalPERS setting the precedent for other pension funds on taking rating agencies to court, local superannuation funds seem unlikely to follow suit.
For instance Greg Sword, chief executive of the $2 billion Labour Union Co-operative Retirement Fund, said the situation of pension funds in the US are different to those in Australia, because they relied on these agencies to provide ratings on instruments such as collateralised debt obligations and sub-prime mortgages - which in this case have proven to be flawed.
"I think the main concern with CalPERS and others would be the ratings that the agencies give to [products like] CDOs," said Sword.
"In our case, we weren't caught in that sort of programs, and I doubt that any of the Australian companies were caught [up] in those circumstances. You have to be a victim before you can claim.
"It doesn't affect us as we're not involved in any of that, but we understand that they [CalPERS] might be reasonably upset and they've relied upon the judgment of rating agencies," he said.
CalPERS reportedly bought $1.6 billion worth of structured investment vehicles in 2006, before they collapsed in 2007 and 2008.
The fund is seeking damages but did not specify the amount, Reuters noted.
We invite you to watch our latest video featuring Zurich Investments senior investment strategist Patrick Noble.
The question of how to generate a satisfactory return to meet investors' needs is becoming ... Watch video
Financial Standard editor Mark Smith presents a roundup of the week's biggest industry news and executive appointments. In this week's news:
QIC and Future Fund back $3bn renewable fund
A strategic partnership ... Watch video
It is often said by equity managers with a mandate to scour the entire globe for investment ideas that getting the geographic allocation right in any given year is the most important driver of returns.
That's ... Watch video
We invite you to watch our latest video featuring Bell Direct chief executive officer Arnie Selvarajah.
In the video and accompanying article he explains how easily the increasing number of advisers using ... Watch video
We invite you to watch our latest video featuring the head of ANZ ETFS, Kris Walesby.
In it he introduces a new ETF, due for launch later in July, which tracks the Euro Stoxx 50 index of major companies ... Watch video
Get it Daily
FREE to your inbox, get the Financial Standard Daily Email.