NH Retirement System & Junk Bonds.

New Hampshire is major investor in Foreign Exchange Markets. I started looking at the 2011 Annual Report for the NH Retirement System.

This is the state agency that is responsible to managing the pension contributions and retirement distributions for state employees. I’m continuing to hear, and don’t like to deal in rumors; that the NH Retirement System continues to lose money in the marketplace along with other state retirement systems most notably, California.

I started reading the annual report. And some things really started jumping out at me:

New Hampshire doesn’t invest pensioners money on their own. Instead they hire various fund managers, investment brokers, etc. I counted 42 of them some of which had interesting names like: Netols Asset Management.

And what concerns me is that there is no accounting provided for these firms that are contracted by the state to manage this money. What their performance was, what the returns or losses were and why they were selected to manage this money.

So I read on….

Found some interesting Collateralized Asset Backed Obligations and Corporate Bonds rated at BBB and Lower and a category of ‘Unrated.’

Can anyone say junk bonds?

Why would New Hampshire be investing in below grade (junk) bonds for any reason?

So I read on again…

New Hampshire is a substantial investor in the Foreign Exchange market and I mean substantial. This is an absolute partial listing:

British Pound  16,630 contracts.

Chinese Yuan 16,988 contracts.

Polish Zloty       4,989 contracts.

Turkish Lira      10,035 contracts.

And this is only a partial listing of the holdings New Hampshire has.

To Be Continued…