Shaky deals cost Detroit pension funds $90 million

[Bozita]

Source: Detroit Free Press

April 19, 2009

Shaky deals cost Detroit pension funds $90 million

Adrian Anderson advised public boards on investments, but costly collapses have some asking: Did he earn his $1-million fees?

BY JENNIFER DIXON and TINA LAM
FREE PRESS STAFF WRITERS

When trustees for Detroit's two public pension funds considered investing more than $700 million of retirees' money, they asked Adrian Anderson of North Point Advisors to research the deals.

Within two years, three of those investments collapsed, costing the pension funds $90 million, with other deals in jeopardy. And questions remain about how well Anderson vetted these and other pension board investments, deals that were rife with red flags.

A Free Press review of his investment reports shows he wrote approvingly of businesses and people with:

• Well-documented histories of failing to pay their bills.

• Lawsuits accusing them of cheating other investors.

• Unsubstantiated claims of sizable wealth or revenue.

Since 2006, North Point of Oakland, Calif., has collected more than $1 million in fees from the two pension funds -- one for police and fire retirees, the other for general city workers.

Anderson's investment research -- known as due diligence -- is noteworthy, however, for what investment experts call a lack of detail and thoroughness.

Read more: http://www.freep.com/article/20090419/NEWS05/904190525/Shaky+deals+cost+Detroit+pension+funds+$90+million

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RELATED ARTICLES
Shaky deals cost Detroit pension funds $90 million -- 4/19/09
Closure of board meeting draws scrutiny -- 4/19/09
Investment consultants: Persistence, skepticism key in due diligence, experts say -- 4/19/09
Warning signs went unnoticed -- 4/19/09
FROME THE ARCHIVES: Pensions in Detroit out more than $2 billion -- 2/8/09

Local investigative journalism may soon find itself on the chopping block. It costs money, big money. Who will do this kind of digging and reporting when local newspapers fold?

[ProgressiveProfessor]

1. CALPERS has similar issues, but is now looking to toxic assets etc as the way out

[customerserviceguy]

2. For every Bernie Madoff out there

there were at least a dozen "researchers" out there saying, "Aw, don't worry about it!" for fat fees.