The state of Michigan has pulled $600 million of its pension fund from wealth management firm Fisher Investments after the company’s founder and chairman made crude and sexually explicit comments during a fireside chat at the Tiburon CEO Summit in San Francisco this week.
In a letter Thursday, Michigan Chief Investment Officer Jon Braeutigam informed the state’s investment board that its bureau of investments, housed under the state Treasury Department, had terminated its relationship with Fisher Investments because of CEO Ken Fisher’s “completely unacceptable comments.”
During a moderated keynote discussion Tuesday with Chip Roame, managing partner at Tiburon Strategic Advisors, Fisher compared his wealth management strategy to picking up women for sex, according to summit attendees who recounted what they heard in interviews with several news outlets.
Fisher spoke of doing acid and his belief that charities are immoral. He also made crude comments about genitalia, attendees said, and mentioned financier Jeffrey Epstein, who was indicted on federal sex-trafficking charges earlier this year before dying by suicide in prison.
Despite a Tiburon policy that requires summit attendees to keep private what they hear and discuss there, three CEOs publicly shared their accounts of what Fisher said in the interest of exposing his behavior and holding the self-proclaimed “self-made multibillionaire” accountable.
Fisher's firm manages private, individual clients and institutions, like the state of Michigan’s pension fund. The State of Michigan Retirement Systems has more than $70 billion in assets.
Fisher Investments was responsible for managing $600 million of the retirement systems’ funds. Braeutigam said in his letter to the investment board that Michigan’s Bureau of Investment decided to fire Fisher Investments after learning of Fisher’s remarks from news reports.
“… All were in unanimous agreement that prompt termination is the correct course of action,” the letter said.
“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.”
Fisher Investments had managed state funds for 15 years, Braeutigam said in the letter, writing that the firm’s “performance has been good (beating the S&P 1500)."
He added that his staff had not "previously witnessed or been aware of any type of similar comments along the lines of the founder’s recent statements.”
“In our opinion, this history does not out-weigh the inappropriateness of the comments made by the founder,” Braeutigam wrote. The state of Michigan’s in-house investment team will now manage the retirement funds for state employees and public school teachers, state officials said.