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Research

100 Largest US Pensions Lose $27.8 Billion in Q1

Equity volatility causes assets to dip to their lowest since 2015, according to new census data.

By Chris Butera

The top 100 US public pension systems have had their worst performance since September 2015, reports new US Census Bureau data.

Total earnings for the funds were just $14.3 billion in this year’s first quarter, and total assets lost $27.8 billion. They are now down to $3.78 trillion.

Totals have not slipped since September 2015, the Census Bureau reports.

Pension contributions from employees and employers also fell in the quarter. Benefit payments saw a small increase.

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The main driver for the lackluster performance was equity volatility, Roy Eappen, a senior analyst at Wells Fargo Securities, told Reuters. He also said it was a drastic change from the fourth quarter of 2017, where fiscal and monetary policy and the new tax laws showed optimism throughout the industry.

At the start of the year, everything seemed to be bullish for the stock market, but all January gains were erased for the S&P 500 index amid the market selloff, followed by fitful attempts to regain lost ground. The index ended the first quarter with a mere 0.3% advance.

Eappen said that, in addition to the market’s shift, rumblings of a trade war with China, unsatisfactory retail sales, and gross domestic product revisions also hindered stocks.

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Home > News > Newsmakers > Soros to Bankroll Personal Injury Lawsuits
Newsmakers

Soros to Bankroll Personal Injury Lawsuits

The hedge fund billionaire invests in firm that fronts money to plaintiffs awaiting verdicts.

By Chris Butera

George Soros is betting on American personal injury lawsuits.

The billionaire’s Soros Fund Management ($27 billion) is bankrolling a company called Mighty Group, which gives cash advances to plaintiffs in hopes of settlements, and takes a cut of the money, Bloomberg reports.

Mighty Group, which is turning its lawsuits into investment portfolios, fronts $2,000 on average to plaintiffs. Most claims are car- and construction-related accidents. The advances usually cover rent or medical treatment, while plaintiffs are awaiting verdicts. If a plaintiff loses the case, they are not obligated to return the advance.

The company has faced national backlash from the US Chamber of Commerce and the insurance industry for profiting from and encouraging American lawsuit culture.

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By funding Mighty Group’s cases, Soros could be reaping an average 20% per year in returns. According to Bloomberg, this avenue offers steady and predictable returns at a low risk, and with Soros subsidizing some of these lawsuits, that could reduce that risk even further—for him. His investment is part of a $100 million capital raise among institutional investors.

While one of the first institutional investors, the man who broke the Bank of England is not alone in funding the personal injury industry. Hedge fund Apollo Capital Management, which has $248 billion in assets as of December 2017, is also joining the fray.

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