Alternative Visium

As of June 30, 2015 the New Jersey Division of Investment reported having $79 billion in assets of which $22 billion was in Alternative Investments. Tracking from August 31, 2012 the performance of those Alternative Investments in general and one investment in particular we see:

visium

Visium Balanced Offshore Fund, Ltd appeared on the books in August, 2012 for its $100 million purchase price and, assuming the standard 2/20 fee structure for hedge fund investments, would have cost the fund almost $17 million in fees.

What has New Jersey gotten for their $117 million?  For valuation purposes they got to say the trust had over $145 million in assets as of the last valuation date.  In reality…..

According to an ibtimes story:

The multibillion-dollar hedge fund Visium Asset Management has collapsed in the throes of an insider-trading crisis.

The fund told investors Friday that it planned to shut down. Business Insider wrote that it “imploded in the biggest scandal to hit the industry in years” — the largest such closure since officials forced the shutdown of SAC Capital* in 2013.

Visium’s performance has been lackluster of late. It now plans to liquidate its flagship fund and sell another to asset manager AllianceBernstein. That decision was relayed to investors just days after prosecutors announced charges against portfolio managers for allegedly making trades while relying on confidential government information about generic-drug approvals. A Food and Drug Administration official allegedly relayed confidential information to Sanjay Valvani, a top portfolio manager, who was charged with wire and securities fraud.

New Jersey investment people will be scrambling to recoup whatever money they can from a  busted scheme that turned out to be too good to be true, not unlike what participants in the pension plan they are supposed to be funding are doomed to experience.

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* Interestingly enough SAC Capital and its founder Steven Cohen also had a New Jersey connection.

 

 

15 responses to this post.

  1. Posted by dentss dunnigan on June 19, 2016 at 4:03 pm

    I’ve always it’s crazy to expect the taxpayers to guarantee the stock markets return ,counterparts risk not withstanding

    Reply

    • Posted by Anonymous on June 20, 2016 at 6:11 am

      There are very safe long-term investments for pension monies, that provide moderate growth. The finger points to the math challenge pension grinch under the gold dome in Trenton. These folks must be graduates if Trump University. I blame the unions for lack of oversight, where are the unions paid investment consultants? This is political abuse and misuse, employees and retirees are the true victims, meantime the Governor and legislators have ACTS and DROP supplemental accounts that payout Mir monthly than the five pension funds. ACTS and DROP pension payout are almost invisible to the public. Travesty, employees and retirees get screwed by connected political operatives and their benefits get cut not so for elected officials, scandalous!!!!

      Reply

  2. Posted by Anonymous on June 19, 2016 at 4:51 pm

    Am I missing something, a fee $B more in these types of investments and plan asset (book) value will reach COLA statutory reinstatement levels.

    Reply

  3. Posted by MJ on June 19, 2016 at 9:23 pm

    Well…., if it sounds too good to be true it usually is…..

    Reply

  4. Posted by George on June 19, 2016 at 11:11 pm

    Plaford and Lumiere were charged over separate allegations that they used sham broker quotes to mismark the value of securities, inflating returns, and generated more than $5.9 million in extra fees for the credit fund, the U.S. said.

    http://www.bloomberg.com/news/articles/2016-06-17/visium-to-wind-down-four-remaining-funds-after-employee-charged

    Reply

  5. Posted by Eric on June 19, 2016 at 11:28 pm

    Another job well done by the NJ. Division of Pensions and Benefits. No one but suckers invest in hedge funds. The suckers are the NJ taxpayers and the pensioners, while someone else is getting very rich. I wonder whose “friends” are becoming very wealthy? Hmmmm.
    Eric

    Reply

    • Posted by Anonymous on June 20, 2016 at 10:09 am

      The employees of the NJ DIVISION OF PENSION AND BENEFITS do exactly what the Governor tells the Treasurer, which usually has a benefit for a political donor.

      Reply

  6. Posted by Eric on June 20, 2016 at 10:18 am

    Anonymous:
    I agree with you.
    Eric

    Reply

  7. Posted by dentss dunnigan on June 20, 2016 at 11:04 am

    Not to worry this loss will all be factored in with passage of the constitutional yes vote to guarantee the taxpayers and the next 4 generations of kids will forever be in servitutde to the unions .

    Reply

  8. Posted by Anonymous on June 20, 2016 at 5:25 pm

    Declan will put in less time and contribute less money, but his ACTS and DROP payouts will exceed future retirees from the five state sponsored pensions, he’s a hypocrite.

    Reply

  9. Posted by George on June 21, 2016 at 12:08 pm

    Sanjay Valvani, (Visium) hedge fund manager charged with insider trading, found dead

    https://www.theguardian.com/us-news/2016/jun/21/sanjay-valvani-hedge-fund-manager-found-dead

    Reply

  10. […] $200 million Commitment in Pershing Square, LP with a June, 2015 reported market value of $283,887,574.  The value history of this holding,  with an April, 2010 Inception Date, was easy to research since it shares the same page with another bust. […]

    Reply

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