These guys are getting paid for this?
Related: Mass. Pension Fund Loses $16 Billion
"State pension drops a fund; Double-whammy compounded losses for Massachusetts" by Beth Healy, Globe Staff | April 9, 2009
Big losses in a cash fund run by one of the state's most venerable money managers set off a ripple effect that cost it a prominent client - the Commonwealth of Massachusetts' giant pension fund.
Grantham, Mayo, Van Otterloo & Co. was fired by the $36 billion state pension fund yesterday over soured investments in asset-backed securities that were battered amid the credit crunch last year. The firm is run by renowned investor Jeremy Grantham, one of Wall Street's most famous bears, who holds his company out as a stalwart of conservative investment principles.
The losses in question were triggered by a cash fund that invested in asset-backed securities, which can include corporate and mortgage-related debt and securities, and home equity loans.
But the state pension fund was invested in a different GMO fund, its Emerging Country Debt fund. Trouble was, GMO had moved a large portion of the Emerging Country Debt fund assets into the cash fund, called Short-Duration Collateral. Both funds had steep drops last year, compounding the losses to the emerging markets investors....
--more--"But they are going to fix it by repeating the same behavior!!
Umm, that is the definition of INSANITY -- and they are playing with YOUR MONEY!!!!
"State seeks reward in distressed investments; Pension fund is wading deeper into credit markets" by Beth Healy, Globe Staff | April 15, 2009
In the wreckage of the credit markets, investors are starting to look for opportunities. Count the state pension fund among them.
The $36 billion retirement fund for state workers is nearly tripling its potential exposure to distressed debt investments this year - mainly in beaten-up corporate debt - to $800 million. That's a small slice of the total portfolio, at 2 percent. But it's a sign that large investors are looking for places where money can be made, after a crushing year in virtually every realm of the market.
"We're not making a bet on distressed debt, but we think there's opportunity there," said Michael Travaglini, executive director of the fund, called Pension Reserves Investment Management....
He's the highest paid official in the state, can you believe it?
BETTING with YOUR RETIREMENT!
Indeed, the flood of distressed debt in the market has prompted scores of new funds to try to reap profits in the sector. Eighteen private equity firms raised nearly $23 billion in distressed-debt funds in 2008, according to data provided by Thomson Reuters, up from the eight firms that raised $9 billion in 2007. Other players also have raised funds, and some firms, such as Goldman Sachs, are planning to spend parts of giant private equity funds on distressed debt investments.
So richers are hoping to buy the stuff on the cheap, huh?
The state pension fund is planning to allocate $1.5 billion to private equity again in 2009, as it did in 2008, even though that sector is going through a difficult time. In private equity, funds acquire companies and overhaul them, with a goal of taking them public or reselling them at a profit. With the public markets depressed and bank lending at a standstill for the past year, there have been few deals by private equity firms and no stream of gains being returned to investors, such as pension funds.
Oh, so they may be pissing away more of your pension, workers.
Related: Where Your Pension Went
At a meeting of the pension board last Wednesday, the value of the fund's private equity portfolio was marked down between 10 and 15 percent as of Dec. 31. Travaglini expects those negative adjustments to continue for at least two more quarters.... The pension fund had lost 33.3 percent in the 12 months ended Feb. 28....
Meanwhile we have scores of looting legislators and double-dipping bureaucrats!
That can't be helping, can it?
--more--"
