RI Divests From 7 of Raimondo’s Hedge Funds, Including Och-Ziff Which Was Hit By SEC with $400M Fine
Thursday, October 27, 2016
The state has divested from 7 hedge fund investments, including Och-Ziff, which was favored by then-Treasurer Gina Raimondo.
As GoLocal reported last month:
According to reports, the favorite hedge-fund of the Gina Raimondo term as General Treasurer will imminently admit to federal corruption charges.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST“The admission of guilt...is part of a settlement with the Justice Department and the Securities and Exchange Commission after a complex five-year investigation into graft worth hundreds of millions of dollars, shell companies, oil and diamonds,” reports Bloomberg.
Former SEC lawyer and Forbes columnist Edward Siedle, who has been a staunch critic of Raimondo and Rhode Island's hedge fund investments, said Wednesday that the state should be seeking additional moneys.
"A prudent fiduciary under the circumstances might consider whether to seek to recover for any losses due to miss management or malfeasance," said Siedle.
In 2014, when Och-ZIff came under investigation while Raimondo was Treasurer, GoLocal reported:
The firm Och-Ziff has received millions in fees from the Employee Retirement System of Rhode Island - the board selecting Och-Ziff is chaired by Raimondo.
Treasurer's Announcement
Forbes' columnist Edward Siedle is asking if the state will try and seek additional moneys stemming from Och-ZIff's "malfeasance."
The state will "fully redeem" positions with Ascend Capital, Brevan Howard, Brigade Capital Management, Emerging Sovereign Group (formerly Carlyle Group), Partner Fund Management, Samlyn Capital, and Och-Ziff Capital Management, said Magaziner's office, "for an estimated $585 million in the coming months."
The reduction in Rhode Island's hedge fund exposure comes following last month's adoption of Magaziner's 'Back to Basics" plan to "refocus Rhode Island's $7.7 billion retirement system on investments expected to provide growth, reduce volatility and strengthen retirement security."
The office announced that so far in the 2016 calendar year, the Rhode Island pension fund has returned 6.20% beating its benchmark by 43 basis points.
Related Slideshow: RI Public Pension Reform: Wall Street’s License To Steal
See the key findings from Forbes' columnist Edward Siedle, who unveiled his investigative report into the RI pension system, "License to Steal," in October 2013.
"The Employee Retirement System of Rhode Island has secretly agreed to permit hedge fund managers to keep the state pension in the dark regarding how its assets are being invested; to grant mystery hedge fund investors a license to steal, or profit at its expense using inside information; and to engage in potentially illegal nondisclosure practices," said Siedle.
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