New York City pension fund loses $30 million in SVB collapse

Retirement


Metro

May 6, 2023 | 10:18am

New York City teachers, cops and firefighters lost about $30 million in pension funds related to the Silicon Valley Bank collapse.

Critics have accused pension plan administrator Brad Lander, the auditor, of favoring “awake” banks over shareholders.

As of Jan. 31, five city pension funds had invested a total of $41,867,214 in failed banks, according to data provided by the General Accounting Office in response to a Freedom of Information request from The Washington Post.

The supervisory authority, the Office of Asset Management, oversees the investment portfolio.

Among the largest funds keeping the bag was the Teachers Retirement System, which put at least $15,804,413 into SVB. New York City Employee Retirement Plan ($12,930,936), and Police Pension Fund ($8,967,580).

The money ended up as unsecured bonds that weren’t saved by a Federal Deposit Insurance Corporation bailout that saved other depositors.

A third-party asset manager sold nearly all of its investment between Jan. 31 and May 1, recovering about $14 million, but lost $27.9 million, according to Lander’s office. has confirmed.

SVB experienced a messy collapse and famously collapsed in March.
REBECCA NOBLE/AFP via Getty Images

Former SEC attorney and pensions forensic investigator Edward Seedle warned that Lander may have downplayed the losses. Siedle noted that the auditors valued his SVB shares as of his January 31st, when SVB’s price per share was $302.44.

“Losses could easily double or more,” Siedle told The Post.

“New York City taxpayers and pensioners should not believe a word of what they are told. I don’t know.”

Hedge funds, private equity and real estate firms that have contracts to manage the city’s pension funds are not required to disclose their investments.

An official with the Board of Audit said Jan. 31 was the “last audit date,” adding that it “does not disclose the transactions or trading histories of third-party asset managers.”

Lander’s office called the loss “limited.”

“Overall, the losses incurred on the day the SVB collapsed represent only a small fraction of the system’s daily gains and losses resulting from normal market movements,” said spokesperson Chloe Chik.

A favorite of awakened tech buddies and their supporters, Silicon Valley Bank famously collapsed in March, sparking a series of bank failures that consumed the First Republic and signature banks.

SVB and Lander are proponents of environmental, social and governance investments and seek to invest in companies that support progressive political causes.

In January 2022, the bank pledged to fund “at least $5 billion” in sustainability efforts by 2027.

The SVB collapse cost the city’s pension fund nearly $30 million.
Reuters/David ‘Dee’ Delgado

In September 2022, Lander signed a letter against states trying to curb ESG investments, pledging to make the city’s $240 billion retirement fund completely green (and anti-fossil fuel) by 2040. Did.

Eight of the top 10 ESG funds underperformed last year on the S&P 500 average.

“This is evidence of what happens when we get distracted by environmental social and governance scores instead of considering the actual merits of an investment,” said the asset manager and Republican president. candidate Vivek Ramaswamy said. “This is just another example of the public being left with a bag and subsidizing an agenda they may or may not agree with.”




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