Comptroller Lembo Speaks Out Against Hedge Fund Aid Package | Connecticut Public Radio

Comptroller Lembo Speaks Out Against Hedge Fund Aid Package

Nov 15, 2016

The state bond commission has greenlighted a package of aid for one of the world’s top hedge funds, but Comptroller Kevin Lembo voiced his opposition Tuesday morning.

Governor Dannel Malloy announced the deal with AQR Capital last week. Under the terms, the firm would agree to add several hundred more jobs in the coming years, in return for a bundle of loans and grants totaling $35 million.

During the bond commission meeting, Comptroller Kevin Lembo was one of two votes against the deal. He said it’s about the state making difficult choices with limited resources.

"For me, it’s not necessarily is this the right deal, or the wrong deal -- but rather, I think, a recognition that we are at a place where it's not this and that," Lembo said. "We don’t get to do it all, and we're going to have to make some hard decisions. So under the banner of this or that, I'm going to have to vote no on this."

Lembo had also voted against another controversial hedge fund deal; the state cash given to Bridgewater Associates earlier this year.

After the meeting, Malloy said he believes the growth of high paying jobs at AQR should repay the state for its investment.

"If the company was to pick up and move, would that be a good thing?" he asked. "What we’re talking about here is making an investment that guarantees a company stays in our state, and that we recoup the investment we’re making with it."

The Connecticut AFL-CIO also spoke out against the deal. “The Governor is still confused about last week’s election results," said president Lori Pelletier. "He doesn’t understand that giving another wealthy hedge fund tens of millions of taxpayer dollars does nothing to improve lives of working and middle class residents."

AQR manages about $172 billion in assets.

In recent years, the firm has broadened its appeal beyond typical hedge fund “alternative” investments, and now says it has more than half its assets under management in more traditional strategies, such as mutual funds. In fact, AQR now no longer refers to itself as a hedge fund, instead styling itself as an “investment management firm.”

Cliff Asness, who runs AQR, put out a document last year that he termed a research paper, claiming that climate change is not a problem.