Wednesday, August 20, 2014

Huge Hedge Fund bet by Cicilline and Taveras under U.S. scrutiny

                                      So many Questions but none from Taveras

 Renaissance Technologies and Wainwright Investment Council are joined at the hip. At $31 million dollars the Hedge Fund known as "Renaissance Institutional Equities Fund LLC (series B)" was and is  the largest single Investment of Chairperson  Angel Taveras. This one hedge fund investment alone accounted for 11.4% of the entire Providence portfolio as of June 24 th ,2014 and Hedge Funds in general were 15.6% of Providence portfolio.
        So we have been trying to find out more about Wainwright Investment Counsel LLC  and their relationship with Providence's Finance director Mancini and Angel Taveras. Since all the a fore mentioned have refused to disclose the nature of their relationship and the fees or costs bourne by beneficiaries as is required, we have had to review older Providence Investment Commission meetings and any suspicious investments going back several years.
       Wainwright Investment Counsel was hired in November 2005 by Vincent Cianci. Mr Mancini could only provide us with one RFP for the investment adviser position in the last 20 years. Mayor Taveras decided not to even put it out to bid despite his so called extensive review and category 5 commission. Also not discovered by Taveras and the Swat team was an accounting trick of $57 million dollars that the auditors ruled inappropriate in January this year. Because of this ruling it appears that this $57 million was fictitious and will be lost to the pension plan and its benefiticiaries.
      Wainwright Investment Counsel  LLC is theoretically responsible for advising Taveras commission on its investments which are then approved by Taveras. Our communications with and investigation of Wainwright have been suspicious to say the least.
       The offices in Boston are virtually empty and there is no waiting room or brochures of any kind.The firm doesnt answer phone calls.The Website doesn't show any personnel or management team and looks sketchy to say the least.

   Wainwright  settled  for $2.4 million dollars in 2009 claims that clients had complaining about having invested in Bernie Madoff feeder funds. None of this information is disclosed on Providence site.

    Renaissance Institutional Equities Fund LLC (series B) is an iteration of  hedge Fund giant Renaissance Technologies king of High frequency, algorithmic  type trading. recent hearings in late July in the United States Senate produced a report on Hedge Funds using tax dodging schemes the article is linked below and as you will read:
 "The subcommittee focused on options involving two of the largest basket option users, Renaissance Technology Corp. LLC (“RenTec”) and George Weiss Associates." there is a 93 page report exposing and investigating these complicated schemes. Providence 's largest investment is in this companies hedge fund  approve by Chair Taveras. In the past Wainwright has been affilliated with renaissance and in fact they have jointly issued product before. It is unclear what fee sharing or profit sharing arrangement wainwright has with Renaissance because neither Providence or Wainwright will disclose that or confirm what exactly Wainwright, Providence, Renaissance, Mancini, Cianci and Taveras have. Not only did Cianci hire Wainwright in 1995. In 2001 Mr Cianci openly pushed for investing in hedge funds, something that had not been done prior to that time.

                    Bertonazzi pushes hedge funds   

     In the 1st quarter of 2001 Wainwright selected 4 hedge-funds and Providence committed roughly $21 million dollars or 6% of the portfolio. In March and April of 2006 Investment Chair Mayor  David Cicilline approve investments in Point Judith Capital and a large investment in "Renaissance RIEF Fund" the recommendation was made by Eric Bertonazzi at Wainwright Investment Counsel LLC for $20 million on April 1 ,2006.
    Not only did Mr Cicilline and Providence invest in Renaissance in the July 2006 minutes Board member Allan Edwards told new member Craig Baker that they"all" invested in that one also(Renaissance).

                   Providence buys into extraordinary claims of Renaissance 
Love affair reminiscent of Schilling

    The minutes of February 2006 show board members and the Mayor gushing over Mr. Dwyer from Renaissance presentation. There goal was very" Madoff like"  as Mr Dwyer stated:

" We are – we’re shooting to outperform the S & P 500 at a minimum of about 600 basis points. Based on the long terms of the S & P 500 performance, that means we’re looking for a return somewhere in the mid teens, about a year in, year out basis.And then as far as volatility, we’re looking to do about two thirds volatility in the market, and that would mean somewhere, you know, high single digits, low double digit volatility. In other words, let’s say we get – for us a normal year would be return of about 15%, volatility of about 9%, and that would be something that we would be – we would be quite satisfied with. "

"MAYOR CICILLINE: Is there any discussion we need to have? Any further – do you have further comment?
MR. BERTONAZZI: Any other questions?
MR. EDWARDS: I have no further questions. I’m very happy that we’re able to find this. Eric has taken a due diligence on that, and, you know, let success beget success. I sort of – what’s been very interesting to me is your organization. And I would – it would be intriguing to come visit you in Stony Brook. We’re putting up a technology up at the school there.
MR. DWYER: You are?

" MR. EDWARDS: You know we’re coming to the City by the way.
MAYOR CICILLINE: Yeah, of course, we can do this citywide. We’ll charter the City plane.
MAYOR CICILLINE: That is assuming the City yacht is not available."

Like lambs to a slaughter 
"MR. DWYER: Good bye.
MS. YORK: Can I bother you for a card?
VICE-CHAIRMAN PRIGNANO: She is going to invest. She’s getting a card.
MR. EDWARDS: Yeah, I’d say, Myrth –
MS. YORK: I’m going to put it with your preference.
MR. DWYER: Bye-bye everyone.
MR. NAPOLITANO: Take care.
MAYOR CICILLINE: All right, so we need to do an actual motion, I presume.
MS. YORK: Do we?

 So just what were the returns for Renaissance and Providence

according to Wainwright and the City of Providence Renaissance has returned 7.4% annually compared with  6.56% annualized S&P 500 total annualized return over the exact same period.

Wainwright and Renaissance above promised 600 basis points above the S&P 500 per 2/3 the risk. This did not happen despite 71 phd's.

So what Riley so they didnt do what they said ..they still did ok?

From Providence Standpoint they didnt get killed..they got snookered but not killed . So why is it 11% of the fund? Did Bertonazzi get money from Renaissance like they did from Madoff?
Is Renaissance another Madoff? or just another hft long short fund?

Some more troubling news, The Permanent Subcommittee on Investigations is looking into tax evasion and abuse of structured financial products. In July 2014 , a few weeks ago, the subjects of the investigation were announced. You guessed it, it centers on Renaissance Technologies. For those so inclined, you can read the link below and from there download a 90+ page report. from the U.S. Senate

 United States Senate
Committee on Homeland Security and Governmental Affairs
Carl Levin, Chairman
John McCain, Ranking Minority Member
Misusing Basket Options to
Avoid Taxes and Leverage Limits

BASKET OPTION CASE STUDIES.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
A. Basket Option Participants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(1) Deutsche Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(2) Barclays. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(3) Renaissance Technologies LLC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(4) George Weiss Associates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

There's more probably much much more. Eric Bertonazzi talks a very godd game and seems quite professional. But is everything as it seems. What is Wainwright Investment Counsel LLC why did they have a Madoff feeder fund and pay 2.4 million to settle lawsuits? Was this disclosed to Taveras or Cicilline? And now with Renaissance long rumored to be suspicious, what s up with last years co -filing of a new fund managed by Renaissance and Wainwright? Does Wainwright collect fees? Do they or Bertonazzi get paid by Renaissance to manage Providence money? How much and was that ever disclosed?
   Notice the address   on that fund  below . For my regular readers . It is the same one I called they refused to answer any questions and no one else was there and its also  the same address my friends investigated and found "eerie" with no waiting room or brochures or activity of any kind. If you think these are the kind of unexplained ,undisclosed relationships that are appropriate and not due diligence on . Or Taveras is right to make this hedge fund  Providence's largest investment than you are willing to tolerate all kinds of risk.
   For me I dont trust renaissance, wainwright, Madoff, Cicilline or Taveras.

  • Contact Information

    wainwright renaissance fund 1, l.p.
    BOSTON MA    02108

    Business Phone: 617-531-3100
  • Recent SEC Filings

    Recent filings
    Form D/A2013-12-16
    Form D2012-06-15

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