New Orleans City Employees' Retirement System will withdraw its $2 million commitment to a Clinton Group multistrategy hedge fund, said Jerry Davis, chairman. Trustees of the $380 million plan felt performance had suffered because many other investors were withdrawing commitments to the fund amid allegations that Clinton Group misstated the values of some securities, Mr. Davis said. The plan likely will distribute the money among existing alternatives managers, but trustees have not made a final decision because the investment will not be liquidated for a month or two, he said. Morgan Stanley Investment Consulting assisted.
Clinton Group officials did not return calls by press time seeking comment.