Under Investigation, Hedge Fund Manager Resigns As Pension Adviser

Nov 27 2013 | 10:55am ET

A hedge fund manager facing a Securities and Exchange Commission fraud probe has resigned as adviser to the New Haven, Conn., Police and Fire Pension Fund Retirement Board.

The $330 million pension on Monday accepted the resignation of Lawrence Gray. The SEC is looking into whether Gray improperly moved $64 million from an Atlanta pension fund to his Gray & Co. hedge fund, and New Haven's outgoing mayor, in a report to his successor, notes that Gray has "encountered personal financial difficulties in recent months." To be exact, "he had had liens totaling $425,000 filed against his home by the IRS, and owes $1 million after settling a lawsuit that accused him of fraud."

The New Haven pension has $7 million invested with Gray, who has served as its adviser since 1999.

Despite the controversy, Gray maintained some support in New Haven, notably from pension chairman and fire department union chief Jimmy Kottage. Kottage noted that Gray's troubles in Atlanta stemmed from his failure to disclose his dual role as adviser and money manager.

"Larry's been our consultant for over 12 years," Kottage said. "He's done a wonderful job."

Kottage told the New Haven Independent that he does not expect to redeem from Gray's hedge fund, which he called "a good, prudent investment that we're expecting good results from." Kottage added that the fund has returned 12% over the past year.


In Depth

Royalties: The Alternative Assets of the Music Industry

Jul 8 2016 | 7:01pm ET

Recent market volatility has investors seeking greater insight into alternative...

Lifestyle

Vortic: Making Great American Watches Again

Jul 25 2016 | 6:29pm ET

If you are compelled by stories of entrepreneurial vision & drive, or simply...

Guest Contributor

MPI: Like Stellar Returns? Better Understand the Risks First

Jul 22 2016 | 8:44pm ET

When the press reports extraordinarily strong relative or risk-adjusted returns...