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

FINtech Focus: Fundbase Aims To Revolutionize Access To Hedge Funds

Jan 23 2015 | 11:03am ET

Global investment in financial technology—also known as fintech—is booming....

Lifestyle

Looking For A Hedge Fund Manager? Try Davos

Jan 28 2015 | 8:48am ET

Davos, Switzerland seems to have become the hedge fund capital of the world—at...

Guest Contributor

From Switzerland With Love: Some Hard Truths About Central Banks And Risk

Jan 23 2015 | 7:54am ET

In the wake of the Swiss National Bank uncoupling the country’s currency from...

 

Editor's Note