Rhode Island Pension Probes Hedge Fund

Dec 1 2014 | 12:00pm ET

The Rhode Island State Investment Commission is taking a hard look at one of its hedge-fund investments.

The public-pension manager last month held a closed-door review of Mason Capital, which manages $61.7 million for the system. Rhode Island has invested with Mason for nearly three years.

It is unclear what prompted the review. A spokesman for Treasurer Gina Raimondo, who was elected the state’s governor last month, told the Providence Journal disclosing the subject of the discussion could “adversely affect the public interest." The closing of the meeting was recommended by the commission’s legal adviser.

Raimondo’s championing of hedge funds in the pension came in for harsh criticism during both the primary and general election campaigns, but she was still able to earn a 41%-36% victory over her Republican opponent in heavily Democratic Rhode Island.

Raimondo’s spokesman made clear that during the open portion of the meeting, a review of the hedge-fund portfolio’s performance “showed positive results measured against the SIC’s investment strategy of pursuing strong long-term returns while reducing risk,” and that “both of our hedge portfolios outperformed their benchmarks.”

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