Pensions Keep Vigilant Eye on Goldman Case

(April 22, 2010) — Following the Security and Exchange Commission’s fraud charges against Goldman Sachs, public pension funds are assessing their relationship with the troubled investment firm.

According to Pensions & Investments, the funds are not taking any special action, but are keeping a watchful eye on the developments surrounding the SEC investigation.

New York state’s pension fund owns about 2.2 million shares of Goldman Sachs common stock or approximately $352 million as of Tuesday’s closing price. A spokesman for the fund said the New York pension would continue diligent review of Goldman pending further revelations.

In Connecticut, the state’s six state pension funds and eight state trust funds under the $22.9 billion Connecticut Retirement Plans and Trust Funds hold about $42.5 million in Goldman Sachs common stock and $18.5 million in Goldman Sachs bonds. Connecticut Attorney General Richard Blumenthal is launching his own investigation of Goldman Sachs.

Additionally, according to P&I, the SEC charges have pushed the $14.7 billion Indiana Public Employees’ Retirement Fund to reassess its relationship with GSAM.

Separately, hedge fund manager John Paulson arrived in London this morning to address 75 pension scheme managers and trustees at an investor conference, the Financial News reported. The topic of his presentation will be “Managing investments and risks in an uncertain, long term environment”. In the fraud case against Goldman Sachs, the SEC claims that Paulson’s firm, Paulson & Co., helped create and then bet against subprime mortgage securities that the New York-based firm sold to investors. Paulson & Co., one of the world’s largest hedge funds, paid Goldman about $15 million for structuring the deals in 2007.