Prov Pension Fund Investment Continues to Flounder - Drops Another 9.5% in January
Wednesday, February 24, 2021
As GoLocal reported earlier in February, the Providence pension fund underperformed in 2020 and one investment in particular adversely impacted the performance of one of the funds investment in a hedge fund.
That hedge fund, Renaissance Institutional Equities Fund, lost more than 19% in 2020 and in January of 2021, that fund lost another 9.5%, according to Marketwatch.
Providence is heavily invested in this one flailing hedge fund.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTWhen GoLocal first reported the impact of Renaissance, Providence Mayor Jorge Elorza, who serves as the chair of the city’s Board of Investment Commissioners, in a statement from his office said, "The Board of Investment Commissioners actively oversees the Providence Pension Fund's management and will continue to reassess investments in any underperforming funds."
With the latest financial numbers, the Board may be forced to exit Renaissance which will look in the losses. The Board of Investment Commissioners are scheduled to meet today - Wednesday, February 24.
Providence Pension in Focus
In 2020 the S&P 500 gained more than 18.4% in 2020, Providence’s pension fund grew by just 6.4%. The Providence pension fund is managed by Wainwright Investment Counsel, LLC.
Bloomberg reports that Renaissance is being hit with significant withdrawals — redemptions — from those investors who wish to pull out of the fund.
“Clients pulled a net $1.85 billion across the three hedge [Renaissance] funds in December and requested a net $1.9 billion back in January, according to investor letters seen by Bloomberg. Investors are poised to yank another $1.65 billion this month, the letters show,” reports Bloomberg.
The Wall Street Journal reported in January that a letter from Renaissance to investors which was deemed "an unusual move for one of Wall Street’s most secretive firms" painted a dismal situation for the fund's most recent performance.
In the letter from Renaissance to investors, “The firm said losses of between 20% and 30% in 2020 for its three funds open to outside investors should have been expected at some point during the course of the funds’ histories. The letter partly blamed heightened volatility for the weak performance.”
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