Providence’s pension fund has moved quickly to reduce its exposure to hedge funds this year, but a spokesman for Angel Taveras said Wednesday it’s not an effort by the mayor to get an advantage over Treasurer Gina Raimondo in their expected gubernatorial campaign.
“The mayor if anything is acting in a methodical, prudent manner,” Taveras spokesman David Ortiz told WPRI.com. “When concerns started being raised in Rhode Island and across the country, and financial experts like Warren Buffett and others started talking about their concerns with hedge fund investments, the mayor as chair of the Board of Investment Commissioners has a fiduciary responsibility to investigate that.”
The Providence pension system’s hedge-fund investments totaled $40.6 million on Oct. 22, down from $51.3 million on April 23, a reduction of nearly $11 million over six months, financial documents show. The share of total assets invested in hedge funds dropped from 19% in April to 14% this month. The change came to light when Ian Donnis of Rhode Island Public Radio mentioned it in a tweet.
Hedge funds have become a potent issue in Rhode Island politics in recent months, as Raimondo faced heavy criticism for moving more than $1 billion of the state’s pension assets into the higher-fee alternative investments. WPRI.com revealed in May that the city fund, which is overseen by Taveras, had an even larger share of its assets in hedge funds at the time; city officials said the investments dated back to David Cicilline’s tenure.