The board manages the state's pension funds, and the senior investment staff has discretion to hire or terminate managers.
Bloomberg reported that Mr. Fisher made several sexually charged remarks during a speech at a financial services conference sponsored by Tiburon Strategic Advisors in San Francisco.
Sources at the conference said Mr. Fisher talked about genitalia and compared winning money management clients to "trying to get into a girl's pants," the Bloomberg story said.
The investment board's team "became aware of this situation last night (Oct. 9) after reading an industry news article and … leadership discussions this morning and more verification, all were in unanimous agreement that prompt termination is the correct course of action," Mr. Braeutigam said.
"There is no excuse to not treat everyone with dignity and respect. We have high expectations of our managers and staff, not just with regards to returns but also in how they exhibit integrity and respect to all individuals," Mr. Braeutigam said in the memo.
Fisher Investments has managed active U.S. equity strategies for the state retirement system for 15 years during which time the fund consistently outperformed its benchmark, the S&P Composite 1500 index, the memo said.
Mr. Braeutigam said in the memo that his staff had not witnessed and was not aware of Mr. Fisher having made similar comments in the past, but he added "in our opinion, this history does not outweigh the inappropriateness of the comments made by the founder."
The Bureau of Investments will internally manage the $600 million of proceeds from the Fisher Investments termination, which will be liquidated over time to pay retirement benefits.
In a statement, Mr. Fisher said: “Some of the words and phrases I used during a recent conference to make certain points were clearly wrong and I shouldn’t have made them. I realize this kind of language has no place in our company or industry. I sincerely apologize.”