Philadelphia’s city pension fund has dropped money manager Ken Fisher as a portfolio manager, after the high-profile Wall Street mainstay was reported to have made sexist comments at an industry event earlier this month.
“The trustees and staff of the Philadelphia Board of Pensions find Ken Fisher’s comments, as reported by multiple media, to be sexist, offensive, and wholly incompatible with the board’s values,” spokesman Michael Dunn said in a statement.
“The comments are particularly incompatible with the board’s longstanding work on a variety of initiatives, including encouraging the advancement by women and diverse persons more broadly in the financial profession,” the statement said.
On Oct. 8, at the Tiburon CEO Summit XXXVII in San Francisco, sponsored by Tiburon Strategic Advisors, Fisher was quoted as making remarks about female genitalia, picking up girls, and about disgraced financier Jeffrey Epstein that many in attendance found misogynistic; Fisher was banned from future Tiburon events.
The following day, after media reports on Fisher’s comments, Philadelphia’s pension staff convened to discuss the board’s investment policy, which requires addressing whether events affecting a manager’s organization could harm management of the pension fund’s assets.
The city’s pension board concluded that it “should immediately divest Fisher in order to protect the assets of the fund from the consequences of Mr. Fisher’s inappropriate statements," the spokesman said.
Chief investment officer Christopher DiFusco gave the recommendation to the board chair, city finance director Rob Dubow, and to all trustees, who agreed with the recommendation to fire Fisher on Oct. 10.
In a statement released by Fisher Investments, Fisher said: “Some of the words and phrases I used during a recent conference to make certain points were clearly wrong and I shouldn’t have made them. I realize this kind of language has no place in our company or industry. I sincerely apologize.”
Philadelphia’s city pension had invested roughly $54 million under management with Fisher’s firm, and first invested there in May 2008. Over that period, Fisher’s firm returned 8.7% annually, after fees, as of Aug. 31.
The $54 million will be reinvested with index manager Rhumbline [Advisers], and the board will decide “at a later date if another active manager will be chosen to handle the funds,” Dunn said. Fisher founded Fisher Investments, the firm fired by Philadelphia.
Philly isn’t the only institutional investor to cut Fisher loose. According to Reuters, the city of Oakland, Calif., Michigan’s retirement system, and a Florida state pension board either have Fisher under review or have dropped Fisher as a money manager. Fidelity Investments criticized the money manager over the remarks, saying it was reviewing the $500 million Fisher’s firm manages for the mutual fund giant.
Alex Chalekian, chief executive of a financial advisory firm, called out Fisher in a video posted Oct. 9 on Twitter. He and other attendees said Fisher had made comments about genitalia, picking up girls, and Epstein, among other topics. Epstein died by suicide in August while in jail awaiting trial on sex trafficking charges.
Local investors weren’t surprised by Philly’s pension fund decision.
In the professional world of Fisher’s asset management peers, "his behavior was viewed as appalling and offensive. He subsequently apologized. Most of the shocked professionals I spoke with said, ‘too little, too late,’ " said David Kotok, chief investment officer with Cumberland Advisors, which manages bond portfolios for pension funds and other clients.
“Why does a man of Fisher’s status place himself this way in front of such a prominent audience? Did he think the [non-disclosure agreement] that participants signed would protect him? Was he trying to be cute or cool?” Kotok said.
“The previous all-boys’ club of finance has changed. For us, that evolution happened a long time ago. Women have owned parts of Cumberland and held prominent officers’ positions for three decades-plus,” he said.