Hedge Funds A Campaign Issue In Mass.

Hedge Funds A Campaign Issue In Mass.

Hedge funds have become a political issue in the Massachusetts race for state treasurer. Incumbent Tim Cahill’s decision to invest in hedge funds is coming back to haunt him as challenger James O’Keefe is challenging him to publicly debate a host of issues, including Cahill’s failure to blow the whistle on Boston’s now well-publicized construction fiasco known as the Big Dig, as well as his decision to invest in Amaranth Advisors, which resulted in a loss of $40 million in state pension funds. “If I’m elected,” O’Keefe said in a statement. “I will not gamble our public school teachers’ pensions on risky hedge funds like Amaranth. Instead of rolling the dice with our teacher’s retirement funds, we should invest in local businesses, energy conservation and socially conscious companies that will give a reliable return while also strengthening the economy.” There’s been no comment from Cahill’s office. However, earlier this year the treasurer, reputedly a HF enthusiast, announced that another state fund, The Pension Reserves Investment Trust, grew 5% to a record $40 billion, thanks to Cahill’s decision to shift allocation to hedge funds, private equity and the like, thus exceeding its benchmark. The way things look now, the hedge fund issue may not turn the tide for O’Keefe. In the only available poll on the race, from August, he was trailing Cahill by 38 percentage points but almost as many people who favored Cahill were also undecided.