Gina Raimondo's Flip-Flop

Rhode Island Treasurer Gina Raimondo loaded up the state pension portfolio with hedge funds. Now that she’s running for Governor she sold the position in Daniel Loab’s Third Point LLC hedge fund. The WSJ explains here:

So why the Raimondo heave-ho? The answer is union politics, specifically opposition by the American Federation of Teachers to education reform, especially school choice. Mr. Loeb and his wife are big donors to charter schools, which is enough by itself to earn the wrath of AFT President Randi Weingarten.

But the AFT put Mr. Loeb high atop the union’s hedge-fund black list last year because he also sits on the board of the New York chapter of StudentsFirst, Michelle Rhee’s education reform outfit that advocates teacher accountability in part based on student achievement. He is also a trustee of the Manhattan Institute, which favors school reform and in 2011 honored . . . Ms. Raimondo.

Mr. Loeb responded to the public union pressure last year by pledging an additional $1 million in Ms. Weingarten’s honor (on top of an original $2 million) to the Success Academy Charter Schools in New York City and encouraging others to do likewise.

Ms. Weingarten hasn’t forgotten, and she and her national enforcer Dan Pedrotty have been leaning on Ms. Raimondo to pull the state’s pension-fund cash from Third Point. Last week she obliged. A spokeswoman for the Treasurer says politics had nothing to do with the decision, which she says was motivated by the commission’s decision to reduce its “beta risk” (i.e., sensitivity to equity market moves). According to the Treasurer’s office, Third Point has the “highest equity market sensitivity” among the state’s hedge-fund investments.

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E.J. Smith is the Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH, where he completed course-work in Practical and Defensive Handgun, Conceal Carry Pistol, Shotguns, Precision Scope Rifle and Kidnapping Prevention. E.J. plays a Yamaha Recording Custom drum set with Zilldjian cymbals. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com. Sign up here to receive all the best content from Richardcyoung.com each week.