Fletcher fallout: Louisiana auditor criticizes pension funds

The Louisiana state legislative auditor has issued a report criticizing investment practices of three public pension systems that together invested $100 million in a Fletcher Asset Management fund, which a court recently ordered liquidated. As The Wall Street Journal reports, the report found, among other issues, that the funds didn’t adequately document whether they would be able to liquidate each investment in their portfolio at a fair market price and within a reasonable time frame. The three funds have combined assets of more than $2 billion, as of June 30, 2011, according to the report. The report notes that three pension funds—the Firefighters’ Retirement System of Louisiana, the Municipal Employees’ Retirement System of Louisiana and the New Orleans Firefighters’ Pension and Relief Fund—have been trying to recoup money from their investment with Fletcher for more than a year. Last July, Louisiana lawmakers requested a review of the investment practices and procedures of all of the retirement systems in the state advised by Memphis, Tenn.-based firm Consulting Services Group after concerns emerged about the investment with Fletcher. CSG had recommended the investment with Fletcher, a New York-based hedge-fund firm. In responses to the auditor included in the report, officials from the retirement systems stood behind their investment practices and decisions, but also said some documentation could be improved. Representatives for the funds didn’t immediately respond to requests for comment from The Wall Street Journal. Read the full story here.