Top pension consultant NEPC questions sustainability of Fisher Investments

BOSTON (Reuters) – Top pension consultant NEPC said it questioned the “sustainability” of Fisher Investments, in a memo sent to NEPC clients and seen by Reuters on Tuesday.

The memo, a setback to Fisher as major clients move to withdraw assets, is dated Oct. 17. In it NEPC recommended that clients terminate holdings with Fisher over what it called “distasteful remarks” that firm founder Ken Fisher made at an investment conference earlier this month.

NEPC is a key gatekeeper for investment firms looking to manage assets for public and private sector pension and retirement plans. It has more than 350 clients on retainer with total assets of more than $1.1 trillion.

The memo was sent by NEPC client New Hampshire Retirement System to Reuters in reply to a request. The New Hampshire Retirement System also said on Tuesday that its independent investment committee had voted to terminate Fisher’s firm, which manages about $239 million for the organization. The system said the comments at the conference “bring into question Mr. Fisher’s judgment.”

The action brings to more than $2 billion the amount of money that public and private funds have withdrawn from Fisher’s firm this month in the wake of his allegedly sexist remarks.

A spokeswoman for NEPC declined to comment.

Fisher Investments did not immediately comment.

Fisher’s comments drew widespread criticism after Alex Chalekian, chief executive of a financial advisory firm, called attention to them on Twitter on Oct. 9. Chalekian said Fisher made derogatory comments about genitalia, picking up girls and financier Jeffrey Epstein, among other topics. Epstein committed suicide in August while in jail awaiting trial on sex trafficking charges.

In a memo to his firm’s employees on Oct. 11 Fisher said: “It pains me to know that my comments have caused you grief, concern, and indignation. I sincerely apologize.”

NEPC said Fisher had sent a letter to investors which it said showed a lack of understanding and appropriate contrition.

“The combination of Mr. Fisher’s behavior, the subsequent investor letter, and high-profile redemptions lead us to question the sustainability of the firm,” NEPC said.

The memo further stated that “Mr. Fisher continues to run the firm he founded and remains the majority owner of the business. NEPC has a fiduciary duty to act in the best interest of clients, who now hold assets at a firm facing large and high-profile redemptions. The confluence of these factors leads us to recommend that clients TERMINATE holdings with Fisher Investments.”


The NEPC memo will add to the pressure on other asset owners to drop Fisher or to make the case for staying with the firm. So far, Fidelity Investments and pension fund managers in Michigan, Iowa and elsewhere have pulled assets.

Other asset owners, including SEI Investments Co, have said they are reviewing their business ties but have not yet taken further action. A spokesman for Goldman Sachs Group, which also has money with Fisher, declined to comment on Tuesday.

The issue came up at a meeting of the Los Angeles fire and police pension fund last week, where several commissioners said they wanted to cut ties with Fisher, but others expressed interest in hearing more from Fisher rather than dropping the firm immediately.

One commissioner, Brian Pendleton, said at the meeting and in a later interview that he was anxious to withdraw the systems’ funds money before others moved and “we are the last one holding the last bag.”

Reporting by Ross Kerber in Boston. Additional reporting by Tim McLaughlin. Editing by Steve Orlofsky and Rosalba O’Brien

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