Monday, 1 September 2014
Last updated 2 days ago
Jun 5 2013 | 10:27am ET
The three Louisiana pension funds that invested with troubled hedge fund Fletcher Asset Management have sued its administrator and auditor.
The Louisiana Firefighters' Retirement System, Louisiana Employees Retirement System and New Orleans Firefighters' Pension and Relief Fund allege that Citco Fund Services misled them about the Fletcher International Fund's structure and health. The three pensions invested $100 million with Fletcher in 2008, with the promise of a 12% annual return.
According to the pensions, if Fletcher failed to produce those returns, the difference would be covered by $50 million from Citco. In addition, the pensions said that Citco assured them that their investment was gaining value, growing to as much as $125 million.
But when the hedge funds sought to redeem their money, they received IOUs instead of cash. They have since successfully battled to have the Fletcher fund liquidated in the Cayman Islands and to have a receiver appointed in the U.S., but are still likely facing substantial losses.
If Citco has provided "accurate information," the pensions said, they would have "exercised their right of redemption and demanded payment."
As for Fletcher's former auditor, Grant Thornton, which resigned in March 2010 and nine months later admitted that its original audits were not accurate, the pensions allege that "it was complicit in the cover up of the misrepresentations and omissions."
The pensions also named several Citco subsidiaries, Fletcher itself and several executives, as well as Consulting Services Group, the firm that touted Fletcher to the pension funds. The pensions fired that firm earlier this year.
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...