Scandal-Scarred N.Y. Pension Fires All Funds Of Funds

May 27 2009 | 8:24pm ET

New York State’s $122 billion pension fund, wracked by a pay-to-play scandal that has engulfed several high-profile alternative investments firms, is slashing its fund of hedge funds portfolio and cutting ties to 10 hedge fund managers.

New York Comptroller Thomas DiNapoli is firing 10 hedge funds, all but one of which used placement agents to win business from the New York State Common Retirement Fund, the New York Daily News reports. An investigation by New York Attorney General Andrew Cuomo has revealed that some placement agents paid kickbacks to a pair of aides to DiNapoli’s predecessor in exchange for getting business for their clients. Two men have already pleaded guilty to charges stemming from the probe, including an employee of one of the fired funds, HFV Asset Management.

The cancelled deals totaled some $5 billion, and account for more than 85% of all of the pension’s hedge fund investments. His office is also investigating all of the private equity mandates approved under former Comptroller Alan Hevesi.

In addition to HFV, New York has cut ties to Consulting Services Group, Guggenheim Advisors, Mezzacappa Management, Olympia Capital Management and Pequot Capital Management.


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...

 

From the current issue of

As initial anxiety over Donald Trump’s victory gave way to market euphoria in the days following the election, there was a casualty. Gold prices.