By David Cruz
Correspondent
There is a density to the proceedings at regular meetings of the State Investment Council that can be difficult to penetrate.
But with close to $80 billion in investments to manage, the council’s performance is bound to be of interest to thousands of retirees. This morning, the council seemed pretty pleased with itself.
“The fund returned 16.9 percent for the year, just about 17 percent. As I believe all the beneficiaries in the audience know, our assumed rate of return is 7.9 percent, so we exceeded the assumed rate of return by 9 percent,” said Robert Grady, chair of the State Investment Council.
Treasury staff reported that the council’s investment strategy — heavy on tech and health care, light on government bonds and T-bills — is producing maximum returns, although one study showed the state lagging behind similar-sized portfolios. But some council members, representing public employees, cast a skeptical eye on fees paid to brokers and fund managers. Christie appointee Guy Haselmann defended the policy.
“I don’t mind paying someone an incentive after they make me money,” he said.
The council also announced that the state had sold its stake in General Catalyst — a company that employed current Massachusetts Republican gubernatorial candidate Charlie Baker, who contributed $10,000 to the New Jersey Republican Party. The Treasury Department has been investigating whether the deal violated state pay-to-play laws.
“Ending the engagement, I’m comfortable and I’m glad that’s happening for whatever reason, but I think with this open investigation, with the open question, it should be carried through to a conclusion,” he said.
Liebtag, whose union filed an ethics complaint against council Chairman Grady last week, also moved that the council delay purchasing a further $100 million stake in Hellman & Friedman Capital because, he said, two of its principals had made political contributions to the Republican National Committee.
“To me, the AFL-CIO, the lawsuit, let’s not dance around this, personally I find it a political stunt,” Haselmann said.
“We all know Chairman Grady is involved in the political party; he has never politicized this board from what I can see,” said Haselmann.
“I don’t even know what you’re talking about. The newspapers? Bob Grady? We’re not talking about him. We’re talking about a guy named Charlie Baker from Massachusetts here,” said council member Marty Barrett.
A Treasury Department representative said the investigation into the sale involving Charlie Baker would continue. As for the further investment into the Hellman & Friedman fund, the council agreed to continue its due diligence on the matter, with the union reps on the council comfortable that they had made their point about the sometimes cozy relationships between Republican politicians and the state’s investment managers.
The general consensus here is that the state investment board has had a pretty good year but critics questions who — aside from the state treasury — is benefiting from all this prudent investing and the fees associated with those transactions.