Centinela Capital Partners v. CalPERS CA2/2

FACTS AND PROCEDURAL BACKGROUND

I. Facts

These facts are drawn from Centinela’s original and first amended complaints, as well as from documents subject to judicial notice. (See City of Stockton v. Superior Court (2007) 42 Cal.4th 730, 734, fn. 1 [demurrer looks to “complaint and documents subject to judicial notice”].) Centinela is an asset management firm. CalPERS is the state agency charged with collecting, investing and distributing the pensions of state employees. In 2006 and 2008, respectively, CalPERS hired Centinela to manage two of its $500 million portfolios—the Capital Link I and Capital Link II funds. Each of these funds was created by a detailed written contract: The Capital Link I contract is 95 pages (including 27 pages of schedules), and the Capital Link II contract is 89 pages (including 24 pages of 1 schedules). In 2009, Centinela and CalPERS started discussing the possibility that Centinela might manage a third, $100 million portfolio to be called Capital Link III. On May 16, 2011, Centinela and CalPERS orally agreed that CalPERS (1) would bypass any competitive bidding process and award Centinela the management of the Capital Link III fund, and (2) would…