A senior official at the California State Employees’ Retirement System (Calpers) admitted in April that the country's largest pension fund “could not track” the performance fees (carried interest) that it paid private equity fund managers.

That didn't exactly impress, John Chiang, state treasurer of California and a Calpers board member. “This issue is of great concern to me,” he told the Financial Times. “This will have my close attention until it is solved.”

The reform-minded Chiang vowed to get a clear explanation of why the $302 billion goliath doesn't know how much “carried interest” it has paid over the last 25 years to private equity fund managers. Calpers has cited inconsistent reporting of the payments by the fund managers.

Carried interest is paid when a fund's profits break a pre-set threshold and often totals 20 percent of those profits.

Chiang may not be too happy with what he finds. “Calpers’ total bill is likely to be astronomical. People will choke when they see the true number,” Ludovic Phalippou, a finance professor at the University of Oxford who specializes in private equity, told the FT.

As for your own investments, Peter Hodson, CEO of 5i Research, an investment research firm, has put together a list of five important points investors should know, but may not.

The list includes:

• "Diversification does not need to be overly complicated," he writes in the Financial Post of Canada. "Most mutual funds hold hundreds of securities, which is why most funds can’t beat the market. Academic studies have proven that the additional value of diversification diminishes beyond 15 different securities." So keep your numbers down.
• "Dividend growth stocks beat everything else," Hodson says. Studies conducted by University of Pennsylvania finance professor Jeremy Siegel show that more than 90 percent of the stock market's long-term historical returns come from reinvested dividends. "Many investors make the mistake of seeking out high-yielding dividend stocks," Hodson explains. "But they may be surprised to know that, historically, a company paying a 1-percent dividend that can grow its dividend is far superior to a company paying a 7-percent dividend that can’t grow."

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• Calpers' Weak Investments Produce $233 Billion Pension Shortfall