The investment committee of the $9.2 billion New Hampshire Retirement System, Concord, on Tuesday terminated Fisher Investments from management of a $239 million active core international equity portfolio.
The termination was in reaction to sexist statements made by Kenneth L. Fisher, founder and executive chairman of Fisher Investments, at a conference earlier this month.
In a statement, pension fund officials said Mr. Fisher’s comments were “not only offensive and inappropriate, they are incompatible with the values of the retirement system and bring into question Mr. Fisher’s judgment.”
The New Hampshire pension fund invested in the Fisher international equity strategy in 2001.
The assets redeemed from Fisher Investments will be evenly distributed among the four remaining international equity managers investing in developed markets: Artisan Partners, with current assets of $242 million; Causeway Capital Management, $204 million; LSV Asset Management, $211 million; and Walter Scott & Partners, $287 million.
NEPC, the pension fund’s investment consultant, recently issued a client recommendation to terminate Fisher Investments, according to a client memo obtained by Pensions & Investments.
NEPC consultants said in the memo that Mr. Fisher’s remarks were “sufficiently inconsistent with NEPC’s values to warrant a due diligence response.” They added that Mr. Fisher’s subsequent response in a letter to investors “showed a lack of understanding and appropriate contrition for his behavior. 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 in the memo it 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.”
Including the New Hampshire termination, Fisher Investments has lost at least $2 billion in redemptions since Mr. Fisher made his comments Oct. 8.
Other asset owners invested with Fisher are reviewing the relationship in the aftermath of the founder’s sexist comments.
At a meeting Monday, trustees of the Iowa Peace Officers’ Retirement, Accident and Disability System, Des Moines, made it clear that they found Mr. Fisher’s comments “offensive and not in line with the values of the system,” said Karen Austin, chief of staff in the office of state Treasurer Michael L. Fitzgerald, in a voice mail message. The treasurer’s office oversees investment of the $533 million defined benefit plan.
But conscious of their fiduciary duty to the pension fund, Ms. Austin said trustees “did not want to take any rash actions” regarding the fund’s $83 million portfolio managed by Fisher Investments in active U.S. small-cap value equities. The board will monitor the investment going forward, she said.
Trustees of the $819 million St. Louis (Mo.) Employees’ Retirement System were briefed in a conference call earlier this week about Mr. Fisher’s conduct. They will discuss the pension fund’s $18 million investment in active U.S. small-cap equity with Fisher Investments at the board’s regular monthly meeting Oct. 28, said Richard Olliges, accounting officer.
Trustees will conduct their review in closed session because legal matters might arise, Mr. Olliges said in an interview.
Danielle Walker contributed to this story.
