San Diego County hired a private consultant, Lee Partridge, three years ago to manage their multi-billion-dollar pension fund. His fee at the time was several times more than the the salary of the county employee he replaced.
Now the County Pension Board has agreed to increase the fees they pay Partridge and his partners, Salient, by a factor of about five.
County pension fund CEO Brian White said that’s justified by excellent investment returns over three years.
“For public pension plans greater than a billion dollars," White said, “we outperformed 99 percent of all other public funds.”
The new contract approved this week could pay fees of more than $7 million a year to Partridge's firm.
But San Diego County Treasurer Dan McAllister said the industry average for managing pension funds over $2 billion is less than a million dollars. He said San Diego officials have been duped before.
“People have come to town and more or less hornswaggled the people into believing they were something they weren’t,” McAllister said, “and all of a sudden - when they left with the money - we discovered they were not what they said they were. “
McAllister was one of three pension board members to vote against approving the contract. They were outvoted on the nine-member board.
Four members of the board are appointed by the County Board of Supervisors, and four represent county employee unions. McAllister is the ninth. The treasurer said he wants an independent consultant to evaluate the contract.
But White says he beleives that is unnecessary. He said the pension fund already employs a company to monitor Partridge's fund management practices: Hewitt EnnisKnupp.
