La. pension funds want to look at books of investment firm

Three Louisiana public pension funds plan to examine the books of a New York hedge fund they invested with, concerned after the firm responded to redemption requests with promissory notes and not cash, says The Wall Street Journal. The Firefighters’ Retirement System of Louisiana, Municipal Employees’ Retirement System of Louisiana, and the New Orleans Firefighters’ Pension and Relief Fund invested $100 million with Fletcher Asset Management in 2008. Alphonse Fletcher Jr., a flashy Wall Street trader who started investment firm, promised returns of 12% a year. But a Journal article last week talked about unusual practices at Fletcher’s firm, such as his claims of not losing money in the market. Read the story here. Two of the funds asked for about $32 million back in March; but instead of getting the cash, Fletcher sent them promissory notes, promising a return in two years. In a joint statement released to the Journal, the firms say this response “gives rise to questions regarding the liquidity” of the Fletcher fund “and the accuracy of the financial statements.” Daryl Purpera, Louisiana legislative auditor, says he plans to meet with legislators to discuss laws for new guidelines for public pension fund investment. Read the full story here.