Monday, October 15, 2012

Hedge Funds and NYCERS -- 2010-2012

As of June 30, 2010, NYCERS had no money invested in hedge funds.

As per a August 2, 2010 Wall Street article , Bloomberg appoints Nagaswami as "chair" of the NYCERS board. She was not employed at the time. Concurrently, Bloomberg appoints her to a paid position at the Department of Finance with a salary of $175,000/yr.

I use quotes around the word chair because for some strange reason since 2010 NYCERS has avoided stating for the record who the chair actually is. That in of itself is a warning sign. When a large financial organization can not identify who the Chair of the Board of Trustees is, you know there is trouble.

For the record, the mayor is not a trustee. The person he appoints is the trustee, not the mayor. This is completely different from the other ten trustees who are ex-officio members of the board.

As of June 30, 2011 NYCERS reported having $77.50M invested in hedge funds.

As of June 30, 2012 NYCERS reported having $960.48M invested in hedge funds. In the Comptroller's quarterly report these investments were reported to have a 2.14% loss for the fiscal year ending on June 30, 2012.

In August, 2012 Nagaswami resigned her position as "chair" of the NYCERS Board of Trustees. She announced that she was taking a job with the hedge fund Bridgewater Associates LP, the world’s biggest hedge fund.

In September, 2012 the trustees adopted a resolution thanking Nagaswami for her service to NYCERS.

This sequence is obviously outrageous.

While 85% of the money going into NYCERS comes from employer contributions, in FY-2011 the employees paid $410M in pension payroll deductions. That is an an average of $2,300 from each employee. When the trustees screw up, it is both the employees and the taxpayers who get pounded. The trustees get to go home to Greenwich and work for a hedge fund.

No comments: