A pension chief making bets with his own money | Business Weekly Newsletter
And we examine GM’s recent recall.
Jim Grossman, the chief investment officer for Pennsylvania’s biggest pension fund, has stirred controversy for the heavy bets the fund placed on investments considered riskier than old-fashioned U.S. stocks and bonds. We’ve got a look at his personal portfolio, which shows he is also a daring investor off the job.
Plus, we examine how General Motors’ recall of its electric Bolt vehicles may have impacted the widespread acceptance of electric cars, and explain how, even as concern over climate change grows, coal has made a comeback.
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PSERS, the Public School Employees’ Retirement System, the pension plan for 250,000 former teachers and other retired school workers, has faced criticism for dabbling in “alternative” investments, with bets on private-equity buyouts, hedge funds, and the like. A peek into the portfolio of James Grossman, who has worked for the pension plan for nearly a quarter-century, shows he favors similar investments with his own money.
Grossman has put money into hedge funds, Asian small-caps stock funds, and leveraged funds focused on volatile industry sectors, in a portfolio experts deemed expansive in the number and breadth of investments. Of more than 80 personal investments Grossman reported making since 2018, about three-quarters were in stocks or other assets also held by the pension system or managed by firms under contract with PSERS.
Robert Costello, a veteran financial adviser based in suburban Philadelphia, said: “With just this list of assets, I would say the owner is a high risk-taker.”
The insight into Grossman’s investments underscores the increasingly controversial strategy of the fund. Calling the plan’s profits lackluster, six of the PSERS board’s 15 members tried and failed earlier this year to fire Grossman. The board has since rejected several proposals from Grossman’s team and sought to put more money into U.S. stocks.
Inquirer reporters Joseph N. DiStefano and Craig R. McCoy have more on Grossman’s investments.
What else you need to know
The future, fire, and fear: GM’s march to a future of electric vehicles was interrupted by a recall of its fully electric-powered Bolt. Two defects in the car’s battery led to 14 confirmed fires. And while the carmaker has developed a fix for the defects, not all car buyers are eager to embrace the automotive future.
Coal’s comeback: The much-maligned fuel has staged a comeback, however temporary. Demand for coal has jumped in response to rising natural gas prices and new rules calling for increased coal reserves at some power plants.
‘Predatory’ conduct: A feud between dueling utilities has tumbled into public view. Vicinity Energy, which owns the steam heat system that supplies many Center City buildings, has accused Philadelphia Gas Works of “predatory” behavior in a formal complaint because of the city-owned utility’s plans to increase Vicinity’s fee tenfold.
Pavilion tower: The 1.5 million square foot Pavilion tower opened its doors to the first time to some 350 Penn Medicine hospital patients. The $1.6 billion facility is Penn’s largest capital project ever.
Wawa refresh: The area convenience store institution is experimenting with new technological advances and store formats, hoping to keep pace with retail trends. From drive-thru windows to self-checkout kiosks, Wawa, like the convenience store format broadly, must adapt to survive amid changing customer habits.
Vanguard’s ‘Very Big Problem’: Environmental activists have targeted the Malvern-based investment giant with a campaign that seeks to pressure the company to divest from fossil fuels.