BOSTON (Reuters) - The Los Angeles fire and police pension system voted to terminate Fisher Investments on Thursday over allegedly sexist comments made by founder Ken Fisher earlier this month.
Five of the system’s nine commissioners voted during a webcast meeting to remove the $511 million the system had under management with the firm, of which Fisher is the majority owner.
Several members voiced concerns about the costs involved and suggested diversity improvements Fisher might make instead. But ultimately Fisher’s decision not to show up personally for the pension system’s meeting and instead send several of his executives contributed to the lost business.
“Their management team now is running around the country putting out fires while apparently Mr. Fisher is behind the computer doing deals,” said Brian Pendleton, one of the commissioners supporting the termination.
The action brings to more than $2.5 billion the amount withdrawn from Fisher Investments over its founder’s remarks. Investors including pension funds in Iowa, Michigan and Boston and Fidelity Investments have moved to sever ties with the firm. The withdrawals represent just 2 percent of the firm’s total assets of about $114 billion, however.
Other systems have put the firm under review over Fisher’s remarks at an investor conference but not taken further action. According to a conference attendee, Fisher made derogatory comments about genitalia, picking up girls and financier Jeffrey Epstein, among other topics.
Epstein committed suicide in August while in jail awaiting trial on sex trafficking charges.
After a public backlash, Fisher apologized in a memo to his firm’s employees on Oct. 11. He had been invited to Thursday’s Los Angeles meeting but instead sent executives including firm Chief Executive Damian Ornani.
The executives reiterated the apology and said the firm was taking steps on diversity, including having executives go through sensitivity training. Fisher himself, Ornani said, is not speaking to large audiences “in the near term.”
Speaking to a question about the firm’s stability raised by a pension consultant last week, Ornani said the firm is “very stable.”
With about $114 billion under management, total assets are higher than the $110 billion they stood at before Fisher spoke at the conference, Ornani said, and it is adding new institutional clients. The majority of the firm’s business, more than $67 billion, is with high net worth individuals, according to Fisher’s website.
Ornani and others did not directly address a question about whether Fisher might resign, although one executive said that would impair the company’s investment process.
In addition, Fisher Senior Executive Vice President Carrianne Coffey said the firm has hired consulting firm Russell Reynolds Associates to help with its diversity efforts. These include a task force on diversity and inclusion previously announced.
Several commissioners of the Los Angeles system said they were impressed by the Fisher executives’ commitments but still wanted to hear from Fisher himself.
“Talk is cheap. First of all, an apology from you folks... that’s nice but it doesn’t mean squat,” said one, Kenneth Buzzell.
A transition plan will be developed by November, said system general manager Ray Ciranna.
Reporting by Ross KerberEditing by Chris Reese, Tom Brown and Cynthia Osterman