Commissioners of the $23.9 billion Los Angeles Fire & Police Pension Fund approved the termination of Fisher Investments for management of an actively managed $551 million core international equity strategy by a 5-4 vote.
The decision was made during a special meeting Thursday convened to discuss the Fisher Investments portfolio. Some commissioners raised concerns during a regularly scheduled Oct. 17 board meeting about the sexist comments made by Kenneth L. Fisher, the money manager’s executive chairman and co-CIO at a Oct. 8 conference.
Fisher Investments now has received termination notices totaling $2.6 billion from seven assets owners and one money manager, Pensions & Investments’ reporting shows.
“We need to draw a deep line in the sand” regarding Mr. Fisher’s comments, said Brian Pendleton, a commissioner and vice president of the board, during an audio cast of Thursday’s meeting. Mr. Pendleton made the motion to terminate Fisher Investments.
Given mounting terminations by other asset owners, Mr. Pendleton urged fellow commissioners to support termination of Fisher Investments because “if we don’t terminate, we risk being the last investor out the door.”
Five representatives from Fisher Investments attended the meeting.
Fisher CEO Damian Ornani apologized for Mr. Fisher’s offensive comments on behalf of the firm, noting that Mr. Fisher has “sincerely apologized” for his comments and will not make them again, the meeting audio stream showed.
The Fisher Investments team described the new diversity and inclusivity task force the firm is setting up and promised to report the progress it makes to the board of commissioners.
Mr. Ornani told commissioners that Fisher Investments’ worldwide assets under management were $110 billion on Oct. 8, the day Mr. Fisher made his comments, and had risen to $114 billion as of Oct. 22.
Assets managed for institutional assets now total $34 billion and is evenly split between U.S. and non-U.S. clients, Mr. Ornani said.
He added that the firm’s recent terminations are only coming from a “subset of U.S. institutional investors,” representing about 10% of the current $34 billion from asset owners. The remaining 90% of institutional assets “continues to grow exactly as it did” before Mr. Fisher made his comments, Mr. Ornani said.
Mr. Fisher was invited to attend the meeting, but did not, prompting Commissioner Kenneth E. Buzzell, a retired fireman, to tell the Fisher representatives “an apology from you doesn’t mean squat,” comparing Mr. Fisher’s situation “to an arsonist who isn’t sorry that he started the fire, he’s just sorry he got caught.”
During discussion about the motion to terminate Fisher Investments, several commissioners argued that Fisher Investments should be put on a watchlist for 6 or 12 months to give the firm a chance to show the concrete actions of the diversity task force, but they did not prevail in defeating the motion.
After the motion was passed, Raymond Ciranna, the fund’s general manager, said investment staff will present options for moving the assets from the Fisher Investments termination to other managers in the fund’s international equity portfolio at the fund’s next meeting Nov. 7.
Thomas Lopez, the fund’s CIO, told commissioners that the investment staff has considered moving the Fisher Investments’ assets to active international growth equity manager Baillie Gifford and passive international equity manager BlackRock. As of June 30, Baillie Gifford managed $708 million for the fund and BlackRock managed $838 million, an investment report showed. He did not say how much each manager might be allocated.
Bloomberg contributed to this story.