Hedge Funds Cost N.Y. Pension Plan $3.8 Billion, Report Says
- Comptroller ‘has been frozen in place,’ state department says
- Report is politically motivated, comptroller’s office says
A woman uses an umbrella to keep cool in the mid-day heat on July 6, 2016 in New York City.
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The New York state comptroller’s decision to stick with hedge funds despite their poor returns has cost the Common Retirement Fund $3.8 billion in fees and underperformance, according to a critical report by the Department of Financial Services.
The state comptroller, who invests $181 billion for two systems covering local employees, police and fire personnel, "has over relied on so-called ‘active’ management by outside hedge fund managers," the department said Monday in the 20-page report. "For years the State Comptroller has been frozen in place, letting outside managers rake in millions of dollars in fees regardless of hedge fund performance."