The Los Angeles police and fire pension decided to pull about $500 million from Ken Fisher after a contentious board meeting with representatives from the firm.
The board voted 5 to 4 on Thursday to cut ties with the money manager. The pension joined New Hampshire, Iowa, Michigan, Philadelphia and Boston in withdrawing funds from Fisher Investments following lewd comments made by its founder. The total amount divested comes to more than $2.5 billion.
“Fisher’s words reach millions and only do damage,” L.A. pension commissioner Brian Pendleton said at the meeting. “Other pension funds are going to come to the same conclusion and we shouldn’t be the last ones to turn the lights off.”
Fisher, 68, is suffering an intensifying backlash since he spoke about genitalia and made other offensive remarks and then failed to immediately understand the gravity of his words. He later apologized.
Representatives from Camas, Wash.-based Fisher Investments attended the meeting and addressed the board Thursday. Chief Executive Damian Ornani apologized for Ken Fisher, saying the founder knows his comments were wrong.
“I really apologize sincerely,” Ornani said. “He does too. He understands what he did. This will not happen again. This is not who Fisher Investments is. This is not who Ken Fisher is.”
Commissioner Kenneth Buzzell responded by saying, “Talk is cheap.”
“I’d like to find out what if anything you’re going to do to attempt to right as best you can what’s been done,” Buzzell said.
Fisher representatives defended the firm, saying it’s a great place to work and that the vast majority of employees are upset with the negative portrayal of the firm in the media. The company is also forming a task force to look at policies and procedures.
Commissioners countered, saying they have heard that Fisher’s comments are part of a pattern of inappropriate behavior and no one at the firm can hold the founder accountable for his actions.
Board President Adam Nathanson asked why Ken Fisher didn’t attend the meeting and defend himself and if he has offered to leave the firm. “It’s telling that he’s not here. He’s the one who said the comments. The accountability lies with Mr. Fisher,” he said.
A Fisher representative said he’s too important to the firm to resign.
The Los Angeles pension board called a special meeting Thursday to discuss its contract with Fisher. The board’s options included firing Fisher, putting the firm on watch or transferring assets to a different manager. The board discussed the costs of moving its investment to another money manager and the type of international equity funds that would be most appropriate.
The pension’s chief investment officer recommended that the pension transfer its assets out of Fisher and into another manager.
Fisher Investments, which manages $114 billion, is also facing scrutiny from other pensions that are reviewing their ties to the firm.
Lorin and Leising write for Bloomberg.