Wednesday, July 30, 2014

RI treasury Candidate Seth Magaziners misrepresentations exposed



                                                        Seth Magaziner Revealed

    It really shouldn’t be this hard to verify the claims of a Candidate for any State Office. It’s especially important that claimed performance and track record be verified for the office of Treasurer. We want a candidate who has a track record and experience and most importantly tells us the truth about their experience and record. 

   Unfortunately one candidate for Rhode Island treasurer , Seth Magaziner, has made a series of claims ,exaggerations and misrepresentations neither he nor Trillium Asset Management his employer  can explain. So we have had to put our detective hat on and get to the bottom of this.
   So because Magaziner refused to identify any particular money management function we’ve had to deduce that he was an “ANALYST” for one of several Funds Trillium runs. So we can follow this all together, at this point you should download the small/ mid cap core Fact Sheet

 Trillium Asset Management


download small/mid cap Core fact sheet  (second one down)
 INVESTMENT PROCESS
The investment process begins with sector allocation based on economic outlook, benchmark allocation, and risk/return expectations for each sector. Within these sector guidelines, the strategy seeks stocks with superior earnings growth prospects and environmental, social, and governance (ESG) records, but which are available at a reasonable price. A team of fundamental, sector focused analysts conduct bottom-up financial analysis including a rigorous integrated review of financial and ESG factors. The Investment Management Committee, comprised of portfolio managers and analysts, meets periodically to review and approve recommendations to the buy-list recommended by the analysts. A strategy team, headed by the lead Portfolio Manager, rebalances the portfolio on at least a quarterly basis to identify the best sub-set of names from the buy-list at that particular point of time. The team leverages an optimization process that helps monitor and control portfolio characteristic exposures while overweighting companies based on a proprietary alpha score that includes an analyst rating, an ESG rating, and technical, valuation, and momentum inputs. In this sense, the strategy is fundamentally driven, but quantitatively assisted.
Investment Performance % (as of 3/31/2014)
                                             QTR      1-YR        3-YR        5-YR      GIPS Inception
Gross of Fees
4.8%
28.5%
13.7%
25.8%
10.3%
Net of Fees
4.6%
27.8%
13.0%
25.1%
9.7%
S&P 1000
2.4%
23.2%
14.2%
25.3%
9.1%

You can now recognize this above section of the fact sheet so readers who haven’t downloaded the fact sheet can follow along.

Each of the claims below are direct quotes from  Seth Magaziner on WPRI Treasury Debate  https://www.youtube.com/watch?v=IMYSvfzG4fI   or http://blogs.wpri.com/2014/07/13/watch-newsmakers-almonte-caprio-and-magaziner-debate/
There are also multiple reports of outlandish claims at a Laurel mead debate.I don’t have a tape or transcript.

   Magaziner Quote and claim                                     Fact Finding
..."at the same time I have made strong investment returns for my clients. I look forward to doing the same for the State when I am treasurer"
There is no evidence of returns produced individually by Seth for any client at any time…
He was an research analysts on a team lead by Portfolio manager Laura McGonagle
"the biggest factor in Rhode Island under funding problem, I think, is poor investment returns. Now at Trillium, the firm that I work at in the private sector, we have outperformed the market. We have beaten the market 5 out of the last 7 years. We made north of 30% last year."

The above table from Trillium shows underperformance against the benchmark s&p 1000 for both the 3 yr and 5 yr time frame…

Last 12 month return was 27.8% for small cap not 30% and Seth  didn’t manage it

The SEC and Finra and the CFA are kind of picky Dear Seth, you don’t claim you are the manager ,when you are one of several analysts on a team that also has portfolio managers,(which you were not and you don’t approximate or exaggerate returns
“We need to elect a treasurer who has a track record of producing strong investment returns. That's why I am running for treasurer. That's what i want to deliver to the people of Rhode Island.”

Again Seth has no track record

And that’s what he would bring to the people of Rhode Island
”The most important thing we can do to bring “colas” back to the workers and strengthen the pension system  is to make strong investment returns and My track record as an investor is second to none in this race.”

Not only does he brag about a record he doesn’t have.. he then compares it to the other candidates records which he hasn’t investigated.
I have no comparable periods which to compare any of them
" I have delivered strong returns in the private sector. I will do the same in the public sector for our State."

Again he has not and there is no record of him ever managing any money or fund..he was a RESEARCH ANALYST
"I really cannot stress enough the importance of strong investment returns. The rest is really academic if you dont make good returns."
While we agree…we see no record of him managing money and producing returns of any type ..good , bad   or neutral
" The most important thing when looking at someone’s track record is how they have done relative to their peers. Now, relative to our peers at Trillium, relative to other equity funds, we have outperformed. We have outperformed while I have been there. We've outperformed in two areas that I "oversaw" . I was in charge of all of  "our" investments in financial Services and energy Companies, about $100 million in investment positions." We" outperformed in those sectors and outperformed relative to our peers
This is clearly wrong for the fund he was a part of a team of research analysts the above table shows the underperforming the benchmark over the last 3 years producing 13% vs the benchmark 14.2%. Seth claims hes been there managing money for 3 years. Outr take is that he may have been there , but he didn’t manage money and they underperformed. The end of this comment shows some new claims…he oversaw all investment in Financial Service companies and energy companies for the entire 1.5 billion dollar fund. He specifically managed 100 million in investment positions/ This role is a new revelation that again we have been unable to confirm. We don’t have any record of job title or performance.
"My record as an investment professional is unmatched in this race .I have taken on the responsibility of managing funds for church groups and non profits and retirees. And I have delivered . I look forward to doing the same thing for this state"
Its not clear what he is referring to here. Is he referring to clients of trillium that he specifically manages portfolios or money for in separate accounts? He just needs to tell us which portfolios and how they performed on their own under his management and how he performed compared to peers. It also brings up how is small cap growth analyst style fits with retirees and non profits. Is trillium or Seth placing retirees in  unsuitable investments?



 Seth Magaziner
So those are the claims and the problems with those claims listed in a table . Those statements were made in just one debate. Seth has had similar claims in ads and in print and apparently also  spoken in public at a Laurel Mead Debate. This behavior  is a real issue for Trillium as they cannot allow an employee of whatever status to purposely mislead the public and  investors about their returns and his role in those returns. Most of the Trillium  Investment professionals on the website are CFA designated and the firm compliance director is as well. I know from my CFA ethics classes that Seth has violated several areas of the code. Trillium and Seth need to apologize and fess up and not pretend that Seth Magaziner has either the experience or record he portrays.


Summary

1) Seth is a research analyst not a money manager or portfolio manager nor has ever managed money professionally.

2) Seth has zero Investment professional accreditation or licenses (series 65,66.7,CFP,CFA,ChFC etc)

3) Seth has no track record. His firm does and his team might but he does not.

4) Seth mislead about the performance of his firm in addition to making up his own performance.

5) Seth repeatedly makes investment claims to the public for which he has no evidence. Almost all money managers and portfolio managers have specific track records. Seth is a research analyst perhaps that’s why there is no record. That being the case these statement are known as lies  and that’s not a good sign for Treasurer but probably a great sign for a long political career in Rhode Island.

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