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It’s time to teach hedge-fund mogul Dan Loeb a lesson, pension activists say.
Several trustees for teacher pension plans are planning to confront Loeb, who runs $12 billion New York hedge fund Third Point, when he speaks at an institutional investor conference in Washington tomorrow, The Post has learned.
Teachers and other public employees say it is “outrageous” for Loeb to back efforts to get rid of defined benefit pension plans like theirs while pitching them for business.
Some public employee plans are also moving to yank their money from his fund.
Loeb is involved with StudentsFirst, an education reform group that wants to get rid of defined benefits for teachers and other public employees. He serves on the board of the New York chapter (which has not publicly stated its position on the defined-benefits issue) and has donated $75,000.
Trustees say they plan to challenge Loeb for biting the hand that feeds him when he speaks on a panel moderated by an official from the California State Teachers Retirement System.
The action is being organized by the American Federation of Teachers, whose president, Randi Weingarten, asked Loeb to meet with her and other pension trustees during the conference to discuss the issue. Loeb declined.
“If someone is making money from workers’ capital, they shouldn’t at the same time be trying to destroy the very same plans,” Weingarten told The Post.
Loeb is the first investment manager to be targeted through a new campaign spearheaded by the AFT, whose members have a combined $800 billion in retirement funds.
Meanwhile, at least two public-employee funds invested in Loeb’s Third Point are taking steps to pull their cash from his fund.
One, the $12.4 billion Illinois State Board of Investment, wrote an April 12 letter to adviser EnTrust Capital, which invested $31 million of the pension’s cash in Third Point.
“It would be troubling and embarrassing to now find that one of the firms retained by Entrust on [our] behalf is using the fees paid by [our] participants to work against their interests,” wrote Executive Director William Atwood, according to a copy of the letter obtained by The Post.
Another Third Point investor, the $72 billion Ohio Public Employees Retirement System, is raising similar concerns, sources said.
Although hedge funds have had a mixed record in the past few years, Third Point’s performance has consistently ranked among the best. For the first quarter, it fell slightly behind the S&P 500 with a 9 percent return but has gained about 10 percent annually over the past five years.
However, the hedgie’s investment skills don’t sway the teachers union.
“Returns today are not relevant if a plan is going to be closed tomorrow,” said Weingarten.