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.”
Spokeswoman Jennifer Freeman defended the office of comptroller Thomas DiNapoli, accusing the department of harboring political motives.