Caprio touts pension fund success
In case you missed this last week, here’s some good news regarding the state’s pension fund announced by Gen. Treasurer Frank Caprio on NBC 10’s 5:30 report.
This from Caprio’s office:
Months before the subprime mortgage crisis began to take a toll on banks, financial services companies and even public pension funds, General Treasurer Frank Caprio began taking steps to reduce risk in Rhode Island’s pension portfolio by minimizing exposure to asset backed securities. From his first days in office, Caprio and his investment management team launched a comprehensive assessment of the state pension portfolio and the state’s short-term investments with a specific focus on their exposure to collateralized debt obligations (CDOs), structured investment vehicles (SIVs), and other asset-backed securities.
As part of that effort, Caprio pro-actively moved $1 billion from so-called Quality D money market funds (with loose terms which could have allowed for investment in CDOs and SIVs) into Quality A institutional money market funds which are only invested in government back bonds last March, well before the scope of subprime losses began to rock financial markets. At the same time, Caprio moved approximately $150 million in high-yield investments into safe Treasury bonds, before the high yield market began to decline. Those moves are already paying major dividends as several states are facing financial crises related to defaults and downgrades on subprime-related investments.