The state of Michigan has pulled $600 million of its pension fund from wealth management company Fisher Investments after the company's founder and CEO Ken Fisher made sexist comments at a summit in San Francisco this week.
At the Tiburon conference, Fisher compared his wealth management strategy to picking up women for sex, made explicit remarks about genitalia and mentioned Jeffrey Epstein, the financier who was charged with trafficking girls this year before hanging himself in prison.
Michigan Chief Investment Officer Jon Braeutigam told the state's investment board that its bureau of investments has fired Fisher Investments due to the chairman's "completely unacceptable comments," according to a letter obtained by CNBC.
Fisher was initially defiant amid the backlash in an interview with Bloomberg, in which he said that attendees had mischaracterized his comments, and that he had "given a lot of talks, a lot of times, in a lot of places and said stuff like this and never gotten that type of response."
Fisher, whose Washington-based firm manages over $100 billion in assets, eventually apologized for his comments on Thursday in a statement from his representative.
"Some of the words and phrases I used during a recent conference to make certain points were clearly wrong and I shouldn't have made them," he said. "I realize this kind of language has no place in our company or industry. I sincerely apologize."
In the audio obtained by CNBC, Fisher said at the Tiburon conference: "Money, sex, those are the two most private things for most people," so when trying to win new clients you need to be careful.
"It's like going up to a girl in a bar … (inaudible) …going up to a woman in a bar and saying, hey I want to talk about what's in your pants," he said.
Braeutigam in the letter said that Michigan's Bureau of Investment decided to fire Fisher Investments after seeing news reports of his remarks.
"...All were in unanimous agreement that prompt termination is the correct course of action," the letter said. "There is no excuse to not treat everyone with dignity and respect. We have high expectations of our managers (and staff), not just with regards to returns but also in how they exhibit integrity and respect to all individuals."
Michigan Chief Investment Officer John Braeutigam's full letter to board members, Oct. 10, 2019
This morning, the Michigan Department of Treasury's Bureau of Investments (BOI) terminated Fisher Investments as their founder Ken Fisher made completely unacceptable comments to a conference group where he was a featured speaker. BOI became aware of this situation last night after reading an industry news article and, after leadership discussions this morning (and more verification), all were in unanimous agreement that prompt termination is the correct course of action. There is no excuse to not treat everyone with dignity and respect. We have high expectations of our managers (and staff), not just with regards to returns but also in how they exhibit integrity and respect to all individuals.
Fisher Investments was one of our long-time active domestic equities (managed funds for approximately 15 years) managers and they were responsible for managing over $600 million of State of Michigan Retirement Systems (SMRS) funds. Over the years, their performance has been good (beating the S&P 1500) and in staff's interactions we have not previously witnessed or been aware of any type of similar comments along the lines of the founder's recent statements. In our opinion, this history does not out-weigh the inappropriateness of the comments made by the founder. The securities Fisher Investments managed are all held in the retirement systems' name and in the retirement systems' custodial bank (State Street). These funds, will now be managed internally and over time will be liquidated and moved to cash in order to pay retirement benefits.
Sincerely, Jon M. Braeutigam