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Thu February 6, 2014
Raimondo's Money Moves Criticized By Wall Street Journal
The Wall Street Journal’s editorial board is criticizing Gina Raimondo over a move to drop the most successful hedge fund in the state pension plan. The hedge fund is run by a trustee of a conservative New York think tank criticized by teachers’ unions.
The hedge fund Third Point LLC offered a 25 percent return to Rhode Island’s pension fund over the last year. That’s far better than the 14 percent earned by the pension fund as a whole. Yet the state Investment Commission, which is chaired by Raimondo, voted last week to divest its holdings in Third Point.
In an editorial, The Wall Street Journal says the move amounts to a buckling under by Raimondo due to pressure from a teachers’ union. The editorial points to how the American Federation of Teachers opposes charter schools, and how the hedge fund’s owner is a big charter school supporter.
Raimondo’s spokeswoman, Joy Fox, says the move was routine, to reduce risk in the pension fund’s hedge fund allocation.
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Scott MacKay Commentary