Rhode Island Terminates Third Point, Calling It Too Risky

Jan 30 2014 | 11:24am ET

Rhode Island's main public pension fund has dropped Third Point following calls from the national teachers' union.

The State Investment Commission said it would redeem its investment from the New York-based activist hedge fund, in spite of the fact that it has earned a 49% return on its initial $50 million investment since it was made two years ago. Treasurer Gina Raimondo, who leads the commission, said that move was not political, but was based on the belief that Third Point had become too risky.

The money, which Rhode Island will get back in March, will be invested in other hedge funds, Raimondo's spokeswoman told the Providence Journal.

Last year, the American Federal of Teachers issued a list of 33 investment managers featuring individuals linked to three groups the union claims are seeking to end defined-benefit plans for teachers and other public employees. One of the groups is the Manhattan Institute, where Third Point's Dan Loeb serves as a trustee. Loeb has also backed one of the other groups, StudentsFirst, and is a supporter of charter schools, which the union opposes.

In Rhode Island, hedge funds have become a major political issue, as well. Raimondo has been attacked by her fellow Democratic candidate for governor, Providence Mayor Angel Taveras, over the state pension's $1.15 billion investment in hedge funds.

In 2012, Raimondo was honored by the Manhattan Institute for her pension reforms, which included a shift away from defined-benefit plans.

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...