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Fisher Loses $600M Account After Conference Remarks: Report

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The fallout from investment advisor Ken Fisher’s crude remarks at an industry event now includes the loss of $600 million of assets, according to a report.

The state of Michigan’s pension fund ended its relationship with Fisher Investments due to the “completely unacceptable comments” of the investment firm’s CEO, the Washington Post reported late Friday. 

In a letter to the state’s investment board (and cited by the Post), Michigan Chief Investment Officer Jon Braeutigam said: “All were in unanimous agreement that prompt termination is the correct course of action. There is no excuse to not treat everyone with dignity and respect. We have high expectations of our managers (and staff), not just with regards to returns but also in how they exhibit integrity and respect to all individuals.”

(Related: Ken Fisher’s Off-Color Comments at Conference Spark Debate)

Fisher Investments had managed the state’s funds for 15 years, according to the letter, which was sent Thursday. 

Also in the letter, Braeutigam said that while Fisher Investments’ “performance has been good (beating the S&P 1500). … , this history does not out-weigh the inappropriateness of the comments made by the founder.”

Fisher Investments recently managed roughly $114 billion in client assets, so the $600 million in departing assets from Michigan represent a 0.5% decline in assets. 

The State of Michigan Retirement Systems includes about $70 billion in total assets; the funds leaving Fisher Investments account for 0.9% of this figure.  Its in-house investment team will take over management of these retirement funds, the Post said. 

Fisher Investments manages retirement funds for a number of companies and states, including  $386 million of Iowa’s $34 billion in pensions, according to a Bloomberg report.

“Fisher’s remarks are obviously concerning,” Shawna Lode, a spokeswoman for the Iowa Public Employees’ Retirement System, said in an email to Bloomberg. “Although our investment management contracts do not include a conduct policy, we hold our partners to the highest standards and reserve the right to amend or sever any contract at our discretion.”

The Public Employees’ Retirement System of Mississippi has Fisher Investments managing about $500 million, or 2% of its assets, according to CNBC, which also broadcast a recording of certain remarks made by Fisher on Friday.

PERS’ executive director, Ray Higgins, told the network that although it has not decided to end its relationship with Fisher, “… We will certainly consider this matter as well as the response statement that issued by Fisher Investments, as we continue to monitor they provide and ultimately their performance.”

Maxwell Rule, the CFO of Hames grocery chain in Alaska, which has retirement plans managed by Fisher, said that this week’s news “certainly taints [the investment firm's] reputation,” according to Bloomberg.

Rule added: “I wouldn’t comment at this point whether this would lead us to take our business elsewhere, but I will certainly have a conversation with the ownership regarding that. As a fiduciary I have an obligation to have that conversation.”

Event in Focus 

Fisher made his lewd comments at the Tiburon CEO Summit on Tuesday. The following day attendee and advisor Alex Chalekian posted a video on Twitter criticizing the remarks; it has nearly 139,000 views. Other advisors later said Fisher made similar remarks at a June 2018 event organized by the firm IMN. 

On Wednesday, Fisher seemed perplexed by the negative attention his comments were receiving, before issuing a formal apology on Thursday. He has been barred from future events organized by Tiburon Strategic Advisors, as well as from any events organized by IMN. 

Early Friday, Cambridge Investment Research President and CEO Amy Webber said she believes there should be a code of conduct at industry events. Others members of the industry explained that the industry should use this situation as an opportunity for change that can bring more women, younger individuals and others to its ranks.

Webber explained that, although she was not at the Tiburon CEO Summit, she believes that “not only should there be a professional code or conduct and a culture of inclusion at all industry events, those policies have to be enforced and honored,” according to a statement. 

The executive adds that such policies should include “organizers, moderators and attendees.” Furthermore, “We must get to a point where this industry, male dominated or not, carries a culture of respect,” Webber said.

Reacting to a blog posted by Chalekian Friday on Twitter, TD Ameritrade Institutional Director of Innovation Dani Fava said: “Our society is at an inflection point and elevating awareness about what’s acceptable and what’s not is important. KEEP. DOING. THAT.”

Fisher Investments CEO Damian Ornani told employees on Friday that the firm intends to form a diversity and inclusion task force, Bloomberg reported. Separately, Ornani told them in a letter: “Let me be clear: Ken’s comments were wrong. He has admitted that and apologized for them.”

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