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EXCLUSIVE: RI Pension Investment in Raimondo’s Pt. Judith Had Steep Losses

Friday, July 12, 2013

 

The state pension fund investment in Point Judith Capital suffered two years of steep losses before turning a profit, according to new documents that offer the first public glimpse into the performance of the venture capital firm co-founded by General Treasurer Gina Raimondo.

The data shows two straight years of negative returns, sometimes as low as -14.2 percent and -15.3 percent. But since 2011, when Raimondo took office, the returns have been positive, hovering around 10 percent during last year, according to the data, which was obtained by GoLocalProv through a public records request. (The full table is provided below.)

Overall, in the four-year period, the performance of the fund has been weak.

“If you linked the provided quarter to quarter investment return information it shows a total loss of around -16.71 percent for the four-year period,” said Chris Tobe, a public pension consultant who is authoring a book, Kentucky Fried Pensions, about corruption in the state pension system in Kentucky, for which he once served as a trustee.

The swing in returns—from deep negatives to high positives—reflects the high volatility of venture capital, which is considered an alternative investment along with other private equity and hedge funds. “It’s a riskier investment,” said Adley Bowden, the research director for PitchBook, a Seattle-based research firm specializing in private equity and venture capital research. He said the returns for Point Judith reflect the typical performance for a venture capital fund, which normally have 2 percent annual fees and 20 percent shares in any profits, like hedge funds.

Since taking office, Raimondo has shifted about $1 billion in state pension funds over to alternative investments, most controversially hedge funds, as part of a strategy to smooth out returns and avoid the rollercoaster ride of stock market crashes and rebounds. But the lowest returns for Point Judith coincide with the economic downturn, suggesting that at least that one alternative investment was not recession-proof.

Despite the poor performance to date, the state has not actually lost money on Point Judith because it phased in most of its $5 million investment over time: much of the invested money came through during the years of positive returns.

By the end of 2012, state had funded $4.4 million of its $5 million commitment to Point Judith and its account with the firm had an ending balance of $5.8 million, state documents show.

State withholds full records

But there is much the provided documents leave unsaid. For example, there is no cash flow analysis showing when the state made contributions into the fund. “While the stated balances grew it is impossible to ascertain how much of that was contributions and how much was from performances since you do not know the amount or timing of the contributions,” Tobe said.

The data also is not verifiable. GoLocalProv requested the annual audited financial statements for the fund, but the request was denied. Raimondo spokeswoman Joy Fox said the records are considered “confidential and privileged in nature” and therefore are not public under state law. Fox also forwarded a 27-page PowerPoint presentation Point Judith had made before the State Investment Commission, but key data on the historical performance of the firm appears to have been redacted.

“The information provided is not complete or verifiable and therefore investors should be cautious relying upon it,” said Edward Siedle, a Forbes.com writer whose penned a series of highly critical columns that have characterized pension reform in Rhode Island as a Wall Street money grab. Siedle’s firm, the Florida-based Benchmark Financial Services, has since been hired by AFSCME Council 94 to conduct a forensic audit of the state pension system.

Without official records, such as the audited financial statements, Siedle said the public can’t know the answers to key questions, such as into what companies Point Judith has invested the state funds, what really caused the losses in the initial two years, or whether the losses that are claimed are even accurate. “These are the fundamental questions,” Siedle said in an interview.

“It’s information that we all should know,” said Michael Downey, president of Council 94. “My comment is, why all the secrecy?”

Venture fund gamble: negative returns ‘typical’ at first

The state made a ten-year commitment to invest in Point Judith Capital in 2007. In all, the venture capital fund, the second started by Point Judith, drew more than $70 million in investments from a number of investors. Fox said initially negative returns were to be expected.

“As is usual with private equity and particularly venture capital investments, capital flows into the fund—and the capital account statement—gradually over the early years of a fund. Once requested, the capital is deployed in companies where it takes time for the investments to bear fruit. For this reason we expect venture capital funds to have growing capital balances and negative returns in the early years, and to generate positive returns in later years,” Fox said in an e-mail response to a series of questions about the losses.

The pattern is often described as a J curve. “The investment returns are routinely negative in the early years (the dip in the J) as the venture firm incurs costs to improve the performance of the companies it backs. When these early expenditures begin to bear fruit, the performance of the companies improves and their value should increase significantly (the ascender in the J),” Fox wrote.

“It is pretty typical,” Bowden said. “That’s a normal trajectory of returns on a venture fund.”

An official with the national trade association for venture funds agreed. “In the first three years, negative returns is not in of itself a condemnation or all that unusual,” said John Taylor, research director at the National Venture Capital Association, headquartered in Arlington, Virginia.

But the J-curve phenomenon doesn’t explain the extent of the losses in the first two years of the fund, according to Tobe. “It’s very doubtful that it’s going to have this much effect,” Tobe said.

Raimondo herself has previously described the performance of Point Judith as strong. “It’s a strong performer. They’ve produced strong returns. It’s still a little bit early,” she said in a recent WPRI.com interview.

Compared to the industry as a whole, Point Judith appears to have underperformed during the recession, but then it outperformed the industry afterwards. In 2009, the industry had a negative return in just the first quarter. In the remaining quarters the returns were modest but positive, ranging from .24 percent to 3.44 percent, according to the U.S. Venture Capital Index, an annual survey of 1,420 U.S. venture capital funds produced by Cambridge Associates for the National Venture Capital Association.

In the most recent year for which data is available, Point Judith was leading the industry, which overall had positive returns ranging from 4.66 percent to .55 percent over the four quarters of 2012. The comparable range for the Point Judith venture fund was 8.8 percent to 11.6 percent.

Raimondo still has a potential stake in the performance of Point Judith’s investments. After her election, Raimondo resigned as partner with the firm and placed all of her assets in a blind trust. The state Ethics Commission has since ruled that she has taken the necessary steps to avoid any conflicts of interest.

Raimondo continues to collect earnings from Point Judith. Last year, she earned between $201,000 and $500,000 in capital gains from the firm, an amount at least double what her salary was as state treasurer, as GoLocalProv reported in May.

Point Judith is currently pulling ahead in another benchmark issued by PitchBook, which shows that the median rate of return for 42 venture funds it surveyed ranged from 3.62 percent in the first quarter of 2012 to 5.6 percent in the last.

Venture funds are considered riskier

Returns typically dip in the early years of a venture capital fund because the money is invested in small start-up companies that haven’t necessarily sold, or even finished developing their products. Often the valuation of a company is based on its potential rather than its underlying cash holdings, Bowden said.

Until one of the start-up companies in which a venture fund has invested are sold, the returns on the investment on can’t be known with certainty, those familiar with the industry say. “This is kind of like real estate,” Tobe said. “What’s the performance of your house? … It’s almost as hard as calculating something like that.”

The inability to track ongoing performance is one reason so many people believe that public pension systems should not use private equity, according to Tobe, who served as trustee for the Kentucky Retirement System from 2008 to 2012. (As a trustee, he hired Siedle to look into placement agent fees in the retirement system.)

It is nonetheless common for public pension systems to use private equity, according to Bowden. He said a pension fund typically has between 5 and 10 percent of its holdings in private equity.

Bowden said venture funds are considered riskier because of the volatility of the returns and because the liquidity of the investment is very limited. Even in a hedge fund, an investor can withdraw their money within a quarter or 90 days of their decision to do so. In venture funds, on the other hand, an investor normally does not get the money back until what ten-year life of the fund has expired, according to Bowden.

There’s also an obvious inherent risk in investing in companies that have no track record of success. A conventional strategy for a venture fund would be to invest in a number of start-up companies at once in the hopes that one will take off, producing large gains that wipe out the losses on those start-ups that failed, Bowden said.

Treasurer’s office touts earnings

It’s not clear from the data provided how much the state has actually earned from its investment in Point Judith.

When Fox was questioned about it, she responded: “Point Judith II has thus far made distributions equal to 22 percent of the capital the fund has called.” “Distributions” is the industry term for earnings that have been paid out. They are analogous to capital gains on stock, according to Taylor.

In layman’s terms, Fox’s statement means that the state so far has earned 22 cents on the dollar. That is slightly below the industry as a whole. For funds that, like the Point Judith were established in 2006, the overall return was 28 cents on the dollar, according to NVCA data. (In industry jargon the year a fund was started is often referred to as the “vintage” year.)

“They’re a little below water,” Taylor said. “That’s not outrageously far out of line.”

In terms of dollars, the state so far has received payments of $965,577 on $4,426,630 it has invested, according to Fox.

The state committed to investing in Point Judith in 2007. In all, the firm collected about $73 million in investments that year, according to a report on the Alternative Assets Network.

At the time, the State Investment Commission, had a preference for in-state funds, according to Marcia Reback, a longtime member of the commission and former leader of the Rhode Island Federation of Teachers and Health Professionals. Point Judith Capital was the only venture capital fund in the state.

“Point Judith had a leg up,” she said.

After Raimondo’s election, Point Judith Capital relocated to Boston. “At the first opportunity, they moved out of Rhode Island,” Reback said. Partners at Point Judith did not return messages seeking comment.

When the state was recently given an opportunity to invest in Point Judith again, Reback said the treasurer’s staff declined.

Stephen Beale can be reached at [email protected]. Follow him on Twitter @bealenews

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Comments:

Personally I am getting fed-up in reading Stephen Beale's very often one-sided, very biased and totally inaccurate articles.

No on can dispute the above....but as I read it it were written in an an extremely NEGATIVE Manner, the sole purpose, more-so the reporting of the fund's ups and downs, to make our General Treasurer look as bad as could possibly be done!

This report is exactly one Mr. Beale wrote a few months back where HE DID NOT do his homework and properly research the the erroneous information provided to him by Cumberland's, somewhat, Financially Incompetent, and very Thick-Headed Mayor, Dan McKee,...the topic being the reimbursement to cities and towns by the State on the vehicle Valuation and Tax Phase Out Program.

Mr. Beale fell hook, line and sinker for McKee's horribly misrepresented facts, figures and statistics, wrote an article full of mis-facts and misinformation....and then when Mr. Beale was made aware of THE FACTS and how he had been duped, refused to rewrite his story....thereby, in my opinion, proving that Mr. Beale likes to write BIASED articles for whatever, unknown, objective may be his intent??

Comment #1 by TOM LETOURNEAU on 2013 07 12

If the majority of people who have vested interests in the pension fund are unaware of "how" their money is invested (placing bets on Wall St.), then they will pay the price of their ignorance.

Comment #2 by Charles Marsh on 2013 07 12

Personally, I enjoyed this straight forward informative, factual column of Steve Beale on GIna Raimondo since she herself is very secretive and won't give out any information..saying it is confidential and secretive just like the enrage ri corporates who support her who I consider unnamed cowards for they too are secretive and won;t give out their identity. Raimondo is a public figure, is supposed to know what she's being paid to do and if you, Mr letourneau, can't take the criticism, then don;t read the article. You may put her on a pedestal but many of us do not. She is not the golden girl you make her out to be..She used scare tactics and cooking of the financial books to get to where she is today with the help of her Republican friends, including Bloomberg....

Comment #3 by ella mentry on 2013 07 12

It is easy to criticize, but there are no alternatives suggested.

This is a retrospective article, so the author has the ability to suggest what *should have been done*, in contrast to what was done.

Where would we be now, if Raimondo had taken the author's implied course of action?

Would a more conservative approach in the past have produced a better result today than the higher risk approach Raimondo took?

Comment #4 by Charles Beckers on 2013 07 12

ella mental, there you are, the typical "she cooked the books" mouthpiece of the public unions. If you were so enamoured with this factual column, maybe you could present facts about how she cooked the books. Facts!!!

Comment #5 by Patrick Boyd on 2013 07 12

Let me give you an example of what I wrote earlier.

If the State had invested $10,000 in the Venture Fund II at the beginning of 2009Q1, using the IRRs cited in the article, it is straightforward to calculate that investment would have been worth about $9,687 at the end of 2012Q4.

Similarly, if the same $10,000 had been invested in a fund that achieved the U.S. Venture Capital Fund Index average rates of return cited in the article for the same quarters, that investment would have been worth about $10,938.

(If you want to check my calculations, remember, the rates of return are annualized rates, but they only apply for a quarter, so you must divide by 4.)

The problem with all this is that little phrase that appears in every investment prospectus, roughly: Past performance does assure future performance. And that applies to both retrospective and prospective analyses. How would one have known which venture fund to pick back in 2009?

I think even Stephen Beale could have managed that calculation without much help.

Comment #6 by Charles Beckers on 2013 07 12

In my opinion, the pension holders should be pleased that Pt Judith took 4.4 million and turned it into 5.8 million. What's to be upset about? If that same money was in a more typical investment fund -- lets say a bond index fund -- the return would be far less. So, maybe you should thank Gina for having the foresight to give a decent profit? But no, you will just complain that the fund had steep losses in the first two years, even as you admit that is standard for a venture fund. You want high returns but you don't want to take any risk. By the way, a 5 million investment is tiny considering the overall size of the pension plan.

Comment #7 by Katy Sloop on 2013 07 12

There you go Katy

Twisting Facts and Data to suit your love of RISK with POOR PERFORMANCE.

"The state pension fund lost more than $200 million in fiscal year 2012 as the state moved into hedge funds and other alternative investments under General Treasurer Gina Raimondo, raising questions about the investment strategy she has pursued and the viability of the pension reforms she has orchestrated.

The assets in the state pension fund dropped from $7.488 billion in June 2011 to $7.284 billion a year later, a decrease of $204 million, according to the independent annual audit."

At least we know you'll go "DOWN WITH THE SHIP".

RAIMONDO IS A LOSER AND PHONY WHO RIPPED OFF ELDERLY RETIREES.

Fed HER WALL STRET CRONIES and hurt the Fund's Performance.

END OF STORY

Stephen

Comment #8 by Donna Day on 2013 07 12

RAIMONDO IS A FRAUD

Comment #9 by Jack Teller on 2013 07 12

One can't help but think Beale is biased. What a surprise that at the height of the recession the funds lost money. You don't need a Wharton MBA to figure that out. What is impressive is the turnaround. If anyone can find any fund not affected by the downturn in the economy, I would like them to manage my wealth.......if I had any!

Comment #10 by Stephen ORourke on 2013 07 12

Jack

You can say that again!

RAIMINDOUGH IS A FRAUD.

She lied about Point Judith Returns

First is was 24%

Then !2%

Now it might be 4% she says.

Big Difference.

RAIMONDOUGH IS A FRAUD

Comment #11 by Donna Day on 2013 07 12

And this piece of work Treasurer wants to be Governor? NOT!!!

Comment #12 by Mark St. Pierre on 2013 07 12

Why did Donna Day sign her post to Katy Sloop, Stephen?

Comment #13 by Patrick Boyd on 2013 07 12

Donna Day. The bulk of what the pension fund lost in 2012 is not because of the performance of the investment. It is because too much money is being withdrawn from the funds to pay the retirement benefits. If the fund pays out more than it earns, obviously it will have a loss. Also, only a small about of the total pension plan is invested in hedge funds. You know that. I've said it many times. But you persist in implying that any losses in the plan are caused by the 'risky" move into "alternative investments." That is simply not the cause for most of the losses. I bet a lot of the pension plan is invested in low risk bond funds, which are very safe but among the worst performing investments in past several years. You are getting what you asked for. A safe investment. Safe investments tend to yeild low returns. The days of high yeilding safe bonds are gone, thanks to the Obama fiscal policies. Talk to a financial expert who can explain it. I do agree with you on one point. Your pension plan should be far more transparent than it is.

Comment #14 by Katy Sloop on 2013 07 12

Patrick?????

Do your homework read Katy Sloop's Droopy comments about investing.

Specfically her comments on what to invest in.

She uses data that is misleading and some outright false.

so read her comments and if you have any other questions I will be happy to answer them.

Why do you care if this really is Patrick????

Katy is just full of bad advice on RISKY INVESTMENTS with Retirees money, which is highly imprudent violating the ERISA STANDARDS to safeguard and protect Retirees pensions.

Read Ted's WALL STREET FEEDING FRENZY ARTICLE AT GO LOCAL

Comment #15 by Donna Day on 2013 07 12

Patrick???

Please read it before you comment unless you defend the same errors Katy does.

Do you really support her drivel??

Well, Patrick? Do you?

What is un clear Patrick?

Stephen
Stephen
Stephen

Comment #16 by Donna Day on 2013 07 12

Charles Marsh, Pension funds are invested in wall street everyday. In every state. Do you think before the current treasurer the money invested in a lemonade stand. Where would you like pension funds to invest their money? But your right about one thing. Investing is gambling. And that's why you diversify your funds.

And Mr. Beale used the word "had" in the title to drive viewers to the article. Notice he waited until after citing quotes from to anti Raimondo writers to reveal that the return was actually decent and explaining that negative early returns in hedge funds is actually quite normal.
that a miniscule part ($5,000,000) of a multi billion dollar account even gets an article is dumb. He does it to drive the retiree's into a rage with their hatred of Ms. Raimondo. A hatred that is misplaced. Ms. Raimondo never said she wouldn't make adjustments to the pension funds. The rage, should be directed at Governor Chaffee who did say while on the election trail he would protect pensions.
Beale's job isn't to be a journalist. It's to drive visits so golocal can sell advertising.

Comment #17 by Redd Ratt on 2013 07 12

"The inability to track ongoing performance is one reason so many people believe that public pension systems should not use private equity, according to Tobe, who served as trustee for the Kentucky Retirement System from 2008 to 2012. (As a trustee, he hired Siedle to look into placement agent fees in the retirement system.)"

The guy from Kentucky and Seidle are not the arbiters of what suitable pension investments are.Suitable investments have been hashed out quite by people far more capable for many ,many years and those ideas are expressed in ERISA and the pension Protection Act of 22006. I find this whole fishing expedition by AFSCME and friends amateurish and naive.

There is however,one interesting point made in this article and that is the Point Judith Investment. Even though Ms Raimondo resigned ,and placed her assets in a blind trust. She appears to have chosen to get a state ethics ruling as opposed to having the state divest itself of their investment in Point Judith.I would have asked the state to divest. I think those who criticize Raimondo because she did not do that have a legitimate point. But, overall he question of whether or not State run pension funds ,including Rhode Island, can invest in Real estate, Hedge funds, Private Equity funds , timber etc....is comical and makes this investigation look like a circus. Again these are covered under the PPA 2006 and Erisa.

Anyone who understood portfolio theory ,pension investing and fiduciary rules should know this.

Comment #18 by michael riley on 2013 07 12

Michael Riley, Agreed the unions are unsophisticated investors and are being exploited by Mr. Siedle. Ms. Raimondo will be exonerated (not that she needs to be) and Mr. Siedle will go back to Florida with $20,000 of money that could have been spent here by our retiree's.

Comment #19 by Redd Ratt on 2013 07 12

The public sector union folks don’t need to let facts get in the way of a good argument. Gina was tainted from the beginning. “Truth in Numbers!” We don’t need no truth. Truth doesn’t enter into it. What kind of Democrat is she if she doesn’t fight for ever greater benefits for the Union?

Comment #20 by James Berling on 2013 07 12

Redd & Mike

You both are trying to over simplfy which is misleading.

Yes diversify but not with 20 % of the Fund and you know that if you

claim sophistacated investors should know.

When the top two most respected INVESTORS IN OUR UNIVERSE SAY

INDEX FUNDS WILL OUT PERFORM HEDGE only the unwise CONTRIARIAN would

do so with

PENSION FUNDS.

WARREN BUFFET AND BOGEL. Check it out.

Buffet has a 10 year bet and at the half way mark now 5 years he

is ahead almost 9 % compared to a little over 1% to Alternates w/ Hedge.

Now do the math on 8% of 100 Million over 5 years

Try in the area of 50 Million dollars at a Minimum without future Compounding adderd in

Mike I know what you do.

I respect that/

Stephen

Comment #21 by Donna Day on 2013 07 12

No it is the Fact she LIED.

About her performance.

About Fees.

Knowledge of Fees is her duty.

It is ERISA STANDARD TO KNOW EXACTLY WHAT YOU ARE PAYING.

Thesev are pension funds, not investments you can GAMBLE with.

Mike I know you knoe this and I know you would not reccommend over weighted portfolio that needs true diversification.

Stephen

Stephen

Comment #22 by Donna Day on 2013 07 12

Everybody is praising investments in "low risk" bond funds. Those typically hold bonds issued with the full faith and credit of some government, bonds like the ones some in the RI Legislature wanted to stop paying on.

So let me get this straight, we are supposed to invest pension funds in governmental bonds because they are a "safe" investment, not subject to random acts of governmental bodies like the Rhode Island Legislature?

Fortunately, the guys on the Hill (the one in Providence, not the one in D.C.) came to their senses and didn't wreck anyone's pension fund...at least not yet.

Comment #23 by Charles Beckers on 2013 07 12

Mike

You are in the Business.

RAMINDOUGH INTENTIONALLY LIED ABOUT POINT JUDITH PERFORMANCE TO TED SIEDLE AND THE JOURNAL.

SHE PURPOSELY MISLED THEM FOR SELFISH PERSONAL REASONS.

YOU DO NOT GET TO DO THAT AS AN INVESTMENT MANGER WITHOUT GETTING SUED AFTER YOU GET FIRED>

AND AS GENERAL TREASURER SHE DOES NOT GET TO LIE TO THE PUBLIC AND RETIREES ABOUT NUMBERS.

TRUTH IN NUMBERS WAS A LIE.

THAT IS THE PROBLEM AND IT IS NOT A UNION ONE.

HOPE YOU ALL HAVE A GOOD WEEKEND.

Comment #24 by Donna Day on 2013 07 12

CHARLES

YOU ARE KIDDING US RIGHT??

GINA IS IN COURT FOR THEFT OF PENSION FUNDS.

LEGAL CONTRACTS SHE BROKE AND ADVISES BRAKING TO FEED HER CAMPAIGN FUNDS.

YET LEGALLY WE DO NOT HAVE TO PAY THE 38 STUDIO BONDS FOR 100 MILLION

AND LEGALLY RAIMONDOUGH STOLE 87 MILLION A YEAR FROM RETIREES.

THAT MY FRIEND IS WRECKING A PENSION FUND AND THE RETIREES LIVES THAT HAVE BEEN UPENDED.

LEGAL OK TO BREAK????

RAMINDOUGH MORALLY WANTS TO PAY THE BONDS.

MORAL VERSUS LEGAL??

BREAKING THE LAW IS MORALLY WRONG, CORRECT??

AND SCREWING LEGAL BENIFITS FROM RETIREES IS MORALLY RIGHT?

THAT IS JUST SO FULL OF CRAP AND CANNOT EXIT IN THE SAME UNIVERSE.

IT IS SELECTIVE RATIONALIZATION WHICH IS LIAR LIAR PANTS ON FIRE!!!

Stephen

Comment #25 by Donna Day on 2013 07 12

Mike

I respect you, even if I do not agree with you.

We can agree to disagree on the gray issues which are not clear.

But we have a MORAL and LEGAL arguement TO PAY RETIREES WHAT THEY ARE ENTITLED TO.

TAKE THE 100 Million of 38 Studio Bond Money and put it out to screwed retirees.

Now that would be morally right.

News FLASH

BOND HOLDERS WILL GET THEIR MONEY THEY WERE INSURED!!!!!!!!!!!!!!!

Stephen

Comment #26 by Donna Day on 2013 07 12

Elia

Just wanted to give you a "Shout Out"

You are right on the money.

RAIMONDOUGH's Transparancy is not there.

She is hiding and refusing to give Ted Siedle Public Documents from a Public Fund.

News Flash for GINA:

IF I WAS AN INVESTER FROM Detroit, L.A. , Dallas, Hope Valley, ETC

and had the money to Invest I would Be able to see and have the

Investment MATERIAL that Gina is REFUSING to give Siedle.

THAT IS SO WRONG ETHIC CHARGES SHOUKD FOLLOW AS WELL AS A LAWSUIT AS A VESTED RETIREE YOU HAVE THAT RIGHT.

AS a TAXPAYER ALSO YOU HAVE THAT RIGHT

This is PUBLIC MONEY NOT PRIVATE EQUITY OF SOME MILLIONARE.

ELIA IS RIGHT.

How can any of you cklaim we

Comment #27 by Donna Day on 2013 07 12

Sorry

it was time to submit or lose it.

No one can Claim the PUBLIC does not have a right of total transparancy on ALL of our INVESTMENTS.

If you claim it you are breaking the law.

Freedom of Information Act is our Guarantee first.

Seond we are the Investors not RAIMONDOUGH.

IT IS NOT HER MONEY.

ENGAGE RI IS THE DARTH VADER BEHIND THIS CRAP AND BEHIND GINA.

IF YOU TAKE IT IT WILL ONLY GET WORSE.

ELIA please keep commenting, It gives me HOPE the the Message is

getting out on GINA RAIMONDOUGH IS A FRAUD.

GINA IS A LIAR,

GINA IS A THIEF,

and THE PUBLIC HAS A RIGHT TO KNOW.

That must be what Katy and the rest are intentionally missing,

IT IS OUR PUBLIC MONEY, NO SECRETS I CANNOT KNOW.

NOT RIGHT AND WAIT TO WE SEE IN TEN YEARS HOW BAD THIS WAS.

OR EVEN 5 YEARTS.

stephen

Comment #28 by Donna Day on 2013 07 12

Stephen, be nice to me. I'm heavily invested in index funds. Because I'm not a sophisticated investor. And I don't feel the need to beat the markets, I want to have a retirement.
I have a couple online accounts that I try to pick winners at. I see what my success rate is, and so does my wife. Which is exactly why we are in low cost index funds.

Have a good day.

Comment #29 by Redd Ratt on 2013 07 12

Redd

BRAVO

I wish you , when the time comes a HEALTHY, HAPPY, PROFITABLE, and

LONG Retirement.

YOU ARE THE SMART ONE.

Warren Buffet is considered the BEST and he is doing what youb are doing.

God Bless you and enjoy your wife and weekend.


Stephen

Comment #30 by Donna Day on 2013 07 12

Donna/Stephen. The union people are hard workers and definately deserve to have full transparency into how their pension funds are being invested. But...you all have a childish understanding of the investment world. The fact is that nearly all of the top performing state pension plans in the US today are at least partly invested in "alternative/hedge" funds. Look it up. The reports are easy to find on the web. Making blanket statements that Gina is evil for risking your retirement in hedge funds is just silly, and contrary to the reality of almost all the best-performing state pension plans. Do you think you are going to earn 10% or more on your investment if you are not invested in some equity funds? Bond and other "safe" investments are not even coming close to the performance of stock index funds and most hedge funds, except for hedge funds that are taking wild risks and I don't see evidence the RI plan is taking wild risks. Transparency would settle that. You should fight for it.

Comment #31 by Katy Sloop on 2013 07 12

Here is a good story on hedge funds. They are not the great investment they once were. But then again, the RI pension plan is not that heavily invested in them anyhow. If the RI pension plan managers were wise, they'd have most of the money invested in a broadly diversified set of stock and bond index funds, heavily skewed to US large-cap and mid-cap equity funds. That's what I've been doing and my rate of return is actually better than Buffet's Berkshire Hathaway fund (which is essentially a hedge fund in itself). Amatuer investors in the US market over the past few years should have easily made a 10% annual return, unless they are over-invested in bonds. I am making 15% annually with my eyes closed because it's a raging bull market. Was not so easy to do a couple years ago. It's all about getting a long term average annual return of about 7%. That's hard to do. Some years you will lose a percent or two, and some years you will get 20%. But if you want a safe guaranteed few % a year, then stick with bonds. What do you want? Low risk low reward or higher risk potentially higher reward. Low risk high reward only exists on Fanstasy Island.

http://moneymorning.com/2013/01/28/why-top-hedge-funds-cant-outperform-the-market/

Comment #32 by Katy Sloop on 2013 07 12

Katy,

Thank You.

But that is simply not true either. And it is too simple a solution to say all you have to do is create and take BIG RISKS and you will get BIG RETURNS. I was a pension trustee. I studied ERISA LAWS.
I have 2 degrees and I could not find out what Ted Siedle already has.
That is what is so scary about her lack of Transparancy.

We, you and I won’t know until it is too late and PHONY RAIMONDOUGH WILL BE ON A BEACH IN A WARM CLIMATE instead of a Jail Cell.
What if, and IF it can happen is that not the reason to RISK retirees futures.?
What if in 10 years of the 100 million invested we lose 50 million? 75 Million? Or even all 100 Million? What will you say then?

I agree with your index position.


There are many facets that go into investing as you seem to know. Also you do know more than your average person. The little or amount that I know is safe to say a work in progress. I do not claim to be an expert like Ted Siedle, which is the very reason a retiree like I need experts like him desperately.

The more experts looking at what crooked and phony politicians or phony investors are doing the better.

Comment #33 by Donna Day on 2013 07 12

Katy

Look how many good people, charities and people were hurt by Bernie Madoff. Ironically Ted Siedle was an expert witness for the victims against Madoff.

GINA HAS LIED TO THE PUBLIC.

She cannot be trusted.

We are way past arguing about this investment is better than that.

Raimondo is a Public official acting like a guilty private pirate.
Taking the bounty and leaving the rest of us Skull and Bones.
Total lack of TYransparancy which I am glad you agree is wrong.

She has blatenly misled retirees, her numbers are bad.
You keep talking about all these good performance public funds and Great.
GINA lost 204 Million Dollars with her returns.
She should get fired for that alone. But withholding documents and lying about her own Point Judith Firm’s track record is just wrong and illegal. People are investing based on what you tell them. She started with 24% changed to 12% and is now at 4%.
Kate because RAIMONDO refuses to show the doc’s we do not even know if the 4% is a good number.
By the way take a look at the point Judith Portfolio, she invested in companies that went Bankrupt. I want to see all the documents.

One investment on page 25 Medical Metrix Solutions says and I quote from the report “ Valuation is based on sale to AIG Altaris Partners in 2005. Proceeds include approx.. “ ?? Held in escrow
Show me the Money and where it is in dollars and cents. Not If and Buts.

Comment #34 by Donna Day on 2013 07 12

For the rest of You Some food for thought, especially Mike, what do you think?

Remember CROSSRAODS CAME OUT AND TOOK A POSITION FOR GINA ON CUTTING RETIREE BENEFITS IN 2011.

Then Poor CROSSRAODS Took it on the chin in charity donations and gifts.

Well look at Point Judith Documents very closely
GINA RAIMONDO is listed as a TRUSTEE AND VICE CHAIR OF CROSSROADS RI, a statewide Homeless services.

It does not take a Rocket Scientist to see that the HEAVY WEIGHTS OF HER DIRTY HANDS USED HEAVY UNDER HANDED PRESSURE TO have ther poor Executive Director make a statement to press.

Did GINA give a crap that it would hurt the CHATITY?

HELL NO1

BUT IT WAS USED TO HELP HER.

THAT ALONE IS SLEAZY.

We all know non-profits do not make political statements like that?

But what was the poor director to do?

Say no to Gina ??

Maybe you are on the stret with the homeless. That is dirty politics.

Gina,s Job as CHARITY TRUSTEE WAS TO TELL THE DIRECTIOR WE NEVER MAKE THOSE COMMENTS.

Comment #35 by Donna Day on 2013 07 12

Katy

and all

I was enrolled at NYU MASTERS PROGRAM IN PHILANTROPHY.

I TELL YOU THAT FOR ONLY ONE REASON.

IT IS TEXTBOOK 101 charity basics to not incite anger in the public domain you need so badly!

GINA RAIMONDOUGH DOES NOT CARE ABOUT THE HOMELESS, IF SHE DID SHE WOULD NEVER ALLOWED THE CROSSROADS TO COMMENT


stephen

Comment #36 by Donna Day on 2013 07 12

KATY and others

Please read this carefully.
You have proven to me you are above average in knowledge involving investments and even you have been fooled or mislead on Point Judith Fund’s REAL RATE OF RETURN ON INVESTMENTS.

You Katy state above she made for the Fund about $800,000.00.
SHOW ME HOW AND WHERE.

BUT NOW LET’s Get OUT THE CALCULATORS.

Michael IF I AM wrong I will buy you and Katy Dinner.
This STORY HEADLINE should read:
RAIMONDO’s POINT JUDITH FUND STEEP LOSSES STAND at 17% NET LOSS FOR TOTAL RATE OF RETURN. STEEP LOSES 17%

The Steep Losses are still there with serious questions remaining.

IF YOU TAKE THE RETURNS ON MONEY INVESTED QUARTER BY QUARTER FROM THE POINT JUDITH REPORTS EXHIBIT CHART IT ADDS UP TO -17%.
GINA GOT 2% PROFIT PER YEAR PLUS
See Asterisk WHICH ADDS UP TO $500,000.00 all while the FUND was losing -17%.
Her trick and Slick accounting does not tell you she only invested $1 Million in First year and then added more year after year to invest.

Had she invested the whole 5 Million it would have been 5 times as bad.
So in 5 years even her phony $4% claim is less than 1% a year for 5 years.
That sucks.

Look at it another way. Fund might have made $800,000.00 over 5 years.
While during the same 5 year time GINA MADE $500,000.00 over 5 years.

NOW THAT IS REAL TRUTH IN NUMBERS.


Here is what is really BAD. We know GINA made her $500,000.00

But we really do not know what the fund actually made GINA REFUSES TO RELEASE THE DATA TO PROVE POINT JUDITH MADE ANY MONEY AT ALL.
IT IS a 17% LOSS STILL until she provides the data.\

Mike, please do the math, if I am right both you and Katy should be just as upset as I am. GINA WILL NOT GIVE US THE RAW REAL DOLLAR DATA.

Treasurer’s office touts earnings
YEAH EARNINGS FOR HER OWN PERSONAL WEALTH NOT OURS.

stephen

Comment #37 by Donna Day on 2013 07 13

What is most troubling about Treasurer Raimondo's involvement in Crossroads is the fact that money donated by State workers for the homeless was actually diverted by her and her anonymous cronies to fund a television ad campaign designed to sell her pension scheme to the general public. If I'm not mistaken, there was another reason she uncharacteristically jumped onboard two separate charities... it was either to attain tax exemption status or to maintain secrecy as to who her donors are. The woman doesn't have an ounce of decency.

Comment #38 by William Berube on 2013 07 13

Hiccup

Comment #39 by tom brady on 2013 07 13

You should never drink and post Tom.

Comment #40 by William Berube on 2013 07 13

Gina, wake up and smell the roses and read this story.

http://www.businessweek.com/articles/2013-07-11/why-hedge-funds-glory-days-may-be-gone-for-good

When you finish that go after Curt "The rogue sock" Schillin and garnish his wages to repay the Bonds.

Comment #41 by John Thomas Nailor on 2013 07 13

John and William

Right again you both are and the DUMP RAMONDOUGH

FIRE HER BACK TO ENGLAND CAMPAIGN IS GROWING.

Just how many accounts did Point Judith Have?????

Strange, very strange.

At least two, POROVIDENCE FOR ONE MILLION WITH TAVERAS

5 MILLION WITH STATE OF RI.

And it has been said her husband got a HIGH PAYING JOB at PROVIDENCE

WATER SUPPLY BOARD. $500.000.00 theft from State Fund was not enough

she had to go have HUBBY Rip off Providence as a WATER SUPPLY BLOOD

SUCKER for hundreds of thousands of tax payer dollars,

Now add in Fees from Providence Fund.

Now add in General Treasure Salary.

DO YOU START TO GET THE PICTURE OF A VERY, VERY LARGE PIG.

GINA RAIMONDOUGH's PIG FARM to SUPPLY JUST HER.

If this does not make you sick of lousy leaders who lie to your face,

I do not know what will.

PASS it on to just 10 people on your contact list.

10 from facebook

10 from linkedIn

10 from email

Start the movement, enjoy getting this lady out of your pocket.

Stephen

Comment #42 by Donna Day on 2013 07 13

John Thomas Nailor -

Might this be a design to 'lose' monies in hedge funds and tell Rhode Island retirees 'sorry, we lost it', only to have the funds surface somewhere else such as the Bank of Gibraltar?

Isn't that how Scott W. Rothstein, who owned two homes in Point Judith until the feds seized them subsequent to imprisoning him, did it?

Maybe that's the idea. Maybe not. Surely not. But all the secrecy and hiding and 'angry' responses to audits goes a long way to raising those concerns, doesn't it?

Though highly unlikely if not downright improbably, it wouldn't be the first bust-out scheme in Rhode Island, would it?

Comment #43 by paul zecchino on 2013 07 13

William Berube and Donna Day (Stephen) -

The Crossroad 'shenanigans' add an entirely new and not very pretty dimension to this, don't they? Nice touch, using the homeless as a blind, sort of like stealing animal rescue donation jars. Very nice.

Enlightening. It's starting to sound very, very familiar, like down home on the farm week with the Zecchino Estate Grifters.

I do hope I'm wrong, I really do. Because I hate it when I'm right.

Comment #44 by paul zecchino on 2013 07 13

I laugh at the hypocrisy of the unionistas. I recall the now head of the RI Assoc. of Firefighters claiming Raimondo was "cooking the books" when she recommended lowering the expected rate of return to 7.5% from 8% for the state pension fund. His assertion was that you had to view investment returns over long periods of time. Now, the unionistas don't want to allow the time necessary to provide a realistic understanding of the returns of the VC investments.

Comment #45 by James Hackett on 2013 07 14

James Hackett -

Impressive. What can you do in addition to insults? Can you scold? Tell spook stories? Can you geek?

Comment #46 by paul zecchino on 2013 07 14

I think the unions are wasting a lot of energy arguing about hedge funds etc. All your energy should be directed at opening up the pension plan records so you can have a full picture how how the money is invested and how it's performing and all fees paid. Until you do that, you really don't have any idea if the pension plan is being managed in fanstastic or terrible way. Fight the right fight.

Comment #47 by Katy Sloop on 2013 07 15

Katy

Just when I think we reach common ground, you suprise me with a comment like this.

We know the performance under Raimondo is TERRIBLE

RAIMINDOUGH LOST 204 MILLION

HER POINT JUDITH FUND IS SUCKING THE WIND OUT OF RHODE ISLAND SAILS.

#1. GINA AND HER PICKS ARE THE PROBLEM.

#2. CROSSROADS SITUATION IS AS STATED ABOUT AND PAUL Z HIT IT RIGHT

IT IS so low fow RAIMONDO TO HAVE USED AND ABUSED A CHARITY

FOR HER OWN WELFARE WHILE GETTING PAID $500,000.00 for Point

Judith. Come on Just say it GINA IS BAD FOR ALL OF RI

Comment #48 by Donna Day on 2013 07 15

Pay attention:
As the ultimate example of Raimondo's hubris,she is running her 29 yr old former Pt Judith employee ,a research technician named Seth Magaziner (sp?),for Treasurer when she runs for Gov.
She is not going to give up control of the the multi-billion $ pension fund as she continues to funnel its money to her hedge fund friends.
With Raimondo,it is not just a competence issue,but also a character issue.

Comment #49 by mark malachi on 2013 07 16

Wow

is that official, has he filed???

Comment #50 by Donna Day on 2013 07 16




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