Randi Weingarten's Pension Veto
The teachers union chief tries to blackball hedge funds that support school reform.
Public pension funds are frantically chasing higher yields to reduce their roughly $3 trillion in unfunded liabilities. But don't tell that to Randi Weingarten, the teachers union el supremo, who is trying to strong-arm pension trustees not to invest in hedge funds or private-equity funds that support education reform.
That's the remarkable story that emerged this week as the American Federation of Teachers president tried to sandbag hedge fund investor Dan Loeb at a conference sponsored by the Council of Institutional Investors. CII had invited Mr. Loeb, who runs Third Point LLC, to talk about investment opportunities and corporate governance. Ms. Weingarten is an officer and board member of CII.
But Ms. Weingarten's real concern is that Mr. Loeb puts his own money behind school reform and charter schools. In particular, Mr. Loeb is on the board of the New York chapter of StudentsFirst. That's the education outfit founded by former Washington, D.C., schools chief Michelle Rhee that is pushing for more charters and teacher accountability, among other desperately needed reforms.
Ms. Weingarten sent Mr. Loeb a letter demanding a meeting at the CII conference with her and "a small group of pension fund trustees," including "two funds that are current clients of yours." Her agenda? "These plans are concerned about their ability to invest with your firm going forward," Ms. Weingarten wrote, given Mr. Loeb's support for StudentsFirst and its "outspoken attacks" on defined-benefit pension plans.
Mr. Loeb wisely declined the honor of showing up for this political mugging, which