San Diego Fund To Consider Firing Risk-Keen CIO

The San Diego County Employees Retirement System (SDCERS) is by now notorious for its risky investment strategies, which include heavy use of leverage.

Pension360 has covered the pension fund’s board meetings this month, during which some trustees wondered aloud whether the fund should dial back risk.

Now, the board is considering another item: whether the fund’s chief investment officer should keep his job. Reported by the San Diego Union-Tribune:

The county pension board voted Thursday to formally consider firing their Texas investment consultant.

The decision on the future employment of Salient Partners of Houston was set for Oct. 2, one day after the last of the county’s in-house investment staff was scheduled to go to work for the investment firm as part of a years-long outsourcing push.

In the meantime, Chief Investment Officer Lee Partridge of Salient will no longer be permitted to risk up to five times the amount of San Diego County’s pension money invested under his “risk-parity” strategy.

The board considered yesterday the idea of allowing higher amounts of leverage in pension fund investments. But that idea was voted down by a measure of 5-2.

Now, the board has suspended its CIO’s ability to use any leverage at all until the board votes on the CIO’s future. That vote will be held in early October.

Photo by dktrpepr via Flickr CC