July 27, 2004 |
Last year, Pennsylvania taxpayers paid more than $350 million into the state's two largest public pension funds, the Public School Employees Retirement System (PSERS) and the State Employees Retirement System (SERS). This amount was needed to subsidize pension costs not covered by investment profits. The subsidy was necessary even though the two funds were paying more than $250 million in fees to 300 private money managers to manage them. Board members of both pension funds refuse to disclose the criteria used to select the people who manage what amounts to more than $70 billion in assets.
May 23, 2004 |
The New Jersey Pine Barrens aren't known as a financial center. But a hedge fund based in a Medford home enjoyed a brief and improbable reign atop lists of the nation's best-performing investments this year, before regulators and a federal judge in Camden shut it down. Shasta Capital Associates' claims of double-your-money yearly profit evaporated last month when the federal Commodity Futures Trading Commission won a court order from Judge Robert B. Kugler to freeze its assets and suspend its operations.
April 25, 2004 |
Two for you, One for me . . .. Pennsylvania hasn't gotten rich yet from its $5 billion investment in hedge funds. But the hedge funds have. For every dollar they made for the state pension plan last year, hedge-fund operators collected more than 50 cents in fees, says a report filed with the Securities and Exchange Commission by the manager of 55 of the plan's 183 hedge investments. That compares with less than 3 cents in fees for every dollar produced by the pension system's $20 billion in other investments (such as stocks)
March 15, 2004 |
How rich would you be if you could spend every dollar twice? If you could buy a home on the Main Line - and get a Shore house thrown in for free? If your next slot-machine pull came with a complimentary lottery ticket - and both won? That's something like what Pennsylvania achieved last year with a chunk of its $24 billion state workers' pension system. In late 2002, the State Employees' Retirement System invested $2.3 billion in scores of unregulated investment pools called hedge funds, then set up Wall Street trading arrangements - "equity swaps" - to buy the future gains or losses of a similar-size investment in the Standard & Poor's 500 stock index.
March 5, 2004 |
The Pennsylvania state workers' pension system says its expensive bet on unregulated hedge funds paid off handsomely as the stock market rose last year. "After the three tough years of 2000-02, the worst bear market since the Great Depression," the State Employees' Retirement System is "back on track," chairman Nicholas V. Maiale told the state Senate Appropriations Committee yesterday in SERS' yearly budget presentation. In part, Maiale credited the hedge funds, which he said were "not risky," despite their reputation, but instead provided "returns higher than average.
January 23, 2004 |
Does money grow best in the dark? At a time when securities cops and small investors are demanding more accountability in the financial markets, Pennsylvania's state pension fund is following some other big institutions in hiring unregulated investment managers whose methods are deliberately obscure. The $24 billion State Employees' Retirement System is moving billions from familiar, transparent, government-regulated stock-index funds to hedge funds, whose managers do not have to report what they do with clients' cash.
October 15, 2003 |
American Business Financial Services said yesterday that it completed $450 million in borrowings, easing a cash crunch at the lender specializing in high-risk mortgage loans. "We're breathing easier this afternoon," said Albert Mandia, the Center City company's executive vice president and chief financial officer. American Business Financial is paying dearly for the loans, which include $250 million from an investment group led by Lubert-Adler Management, a Philadelphia hedge fund.
September 4, 2003 |
New York Attorney General Eliot Spitzer announced yesterday a sweeping investigation into major mutual-fund companies, accusing them of illegal trading that may have cost shareholders billions of dollars. Spitzer said Canary Capital Partners L.L.C., a large hedge fund, agreed to pay $40 million to settle charges that it invested in the mutual funds in exchange for an opportunity to make illegal trades in the funds' shares. Canary did not admit or deny wrongdoing, but it agreed to help Spitzer's investigation.
June 6, 2003 |
Three women who are veterans of the financial services industry announced yesterday the formation of NewMarket Capital Partners L.L.C., an investment company in Philadelphia that will manage two new hedge funds. NewMarket is managing the funds for CMS Cos., a Philadelphia investment company that helps entrepreneurs manage their money. Patricia Young, Diana Wagner and Mindy Posoff are the founders of the new hedge funds. "We think it's a great time to launch NewMarket Capital Partners because it's anticipated that over $2 trillion will be invested in hedge funds in the next five to seven years," said Young, 48, the company's chief investment officer.
May 13, 2003 |
Investors who have been hurt by the stock market have searched for anything that has been making money during the last three years. For some, the answer has been hedge funds - high-risk, largely unregulated investment pools. Indeed, hedge funds gained an average of 11.2 percent annually in value the last five years, while stock mutual funds lost 1.2 percent in the same period, according to data from Van Hedge Fund Advisors Inc. Since 1990, the hedge-fund industry has grown more than 600 percent after adjusting for inflation, from $92 billion in assets to $650 billion, Van Hedge Fund Advisors estimated.