It would have taken Ken Fisher only five minutes at the special meeting of the Los Angeles Fire and Police Pension Board to realize his bad week was about to get worse. Maybe that’s why he didn’t show up.

Board members castigated the 68-year-old money manager of Camas, Washington,-based Fisher Investments, for his lewd remarks, inveighed about his non-appearance — and then promptly withdrew a half-billion dollars of police and fire fighter pension funds from his investment firm.

“We mustn’t let the little girls and women we impact believe their worth is diminished when profit is involved,” said Brian Pendleton, the board’s vice president, speaking to about 30 people who showed up.

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The contentious meeting marked the most public rebuke to Fisher since he let loose a bunch of vulgar remarks at an industry conference earlier this month. And it captured the enormous hurdles he faces in trying to recover his reputation and keep money from fleeing his firm.

“This may be somewhat unprecedented,” said Charles Geisst, a professor of finance at Manhattan College who has written about the history of Wall Street. “Ninety-nine percent of the time in the past he’d have gotten away with it,” Geisst said, as people would have shrugged it off as “locker room talk.”

State and municipal pension fund terminations have been swift: Michigan at $600 million just days after the comments. Then Philadelphia and Boston, and on Oct. 18, Iowa’s state pension fund had said it would redeem its $386 million. Iowa cited a risk that underscored Fisher’s troubles: The firm may not be able to recruit high-caliber talent in the future and the “negative publicity will probably continue to be a major distraction.”


By midday on Friday came another: The Texas employee retirement fund said it was stripping $350 million from Fisher.

Goldman Pulls

Goldman Sachs Group said it would be dropping Fisher Investments as the underlying manager of its Multi-Manager Global Equity Fund. The firm pulled $234 million, according to a person familiar with the matter. Another large institution, Fidelity Investments, yanked $500 million earlier in the week.

All told, redemptions amounted to $3.1 billion, a slice of the $114 billion Fisher Investments manages.

The backlash stems from Fisher’s offensive remarks and then his failure to immediately understand the gravity of his words. At an industry conference on Oct. 8, Fisher compared the process of gaining a client’s trust to “trying to get into a girl’s pants” and talked about genitalia. Fisher has since apologized for the comments.

At Fisher Investments in Camas, the firm’s founder tried to a reassure a group of employees that they wouldn’t lose their jobs or see their pay affected by his mistakes. On a phone call Thursday with the staff that manages institutional relationships, he expressed remorse and said the business is still growing despite the loss of key clients, according to people familiar with the matter.

The damage his earlier comments inflicted was clear, meanwhile, in Los Angeles on 3rd Street, where the retirement money of police and firefighters was on the line. Pendleton took the first swing at the money manager.


“I know we can achieve top quartile investment returns while also doing the right thing for our community,” said Pendleton, dressed in a vivid blue suit with his blond hair shaved around his ears. Fisher “continues to demean those we serve.”

Pendleton suggested that Los Angeles wouldn’t be the last to pull money. “Other pension funds are going to come to the same conclusion and we shouldn’t be the last ones to turn the lights off,” he said.

Fisher Out

While Damian Ornani, chief executive officer of Fisher Investments, was present to make the firm’s case, Fisher himself didn’t show. Ornani said Fisher was attending to investments for clients.

That didn’t sit well with members of the board. “It’s telling he’s not here today,” said Adam Nathanson, the board president. “That’s a concern for me as a commissioner.”

Commissioner Corinne Babcock lamented his absence as well. “He was invited to come here today,” she said. “Unfortunately he didn’t take that opportunity.”

At almost the same time the Los Angeles meeting was taking place, another board, albeit smaller, on the other side of the country, came to the same conclusion. The Westfield Contributory Retirement Board in western Massachusetts, just over the New York border, held its regular meeting in City Hall. The five-member board didn’t invite Fisher or its representatives to attend, yet discussed that business in less than three minutes.


‘Offensive, Inappropriate’

The board voted unanimously to terminate its $4.3 million investment with Fisher.

Earlier in the week, the New Hampshire Retirement System had voted to pull $239 million from its non-U.S. equity portfolio. The five members of the board held a special meeting that lasted about 15 minutes. The fund had been a client since September 2001.

The board called Fisher’s statements “not only offensive and inappropriate, they are incompatible with the values of the retirement system and bring into question Mr. Fisher’s judgment.”

A letter from New Hampshire’s investment consultant, NEPC, might portend what’s ahead for Fisher. NEPC recommended that its clients with Fisher exposure terminate their relationships with the firm.

Fisher Investments was managing about $10.9 billion on behalf of 36 state or municipal government entities, including pension plans, at the end of 2018, according to the firm’s Securities and Exchange Commission registration. That figure is down from $13.2 billion at the end of 2017.

At the end of the two hour meeting in Los Angeles, some of the pension board members wanted to give Fisher a chance and put the firm on a 12-month probation. That didn’t pass muster with the majority, however, and the vote was 5-4 to divest. Ornani and the four other Fisher Investment executives who spoke to the board had apparently gotten the drift. All had already left.

— With assistance from Sabrina Willmer.