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  • Metro pension holding at risk
    By Thomas
    Goldsmith / Staff Writer
    More than $6.5 million of
    Metro employees' pension money is invested in a poorly
    performing fund headed by two ousted executives of Prison
    Realty Trust, the financially struggling Nashville-based
    owner of prisons.

    Late last week, principals of
    DC Investment Partners sent Metro a draft memo that
    says they will "terminate" the firm's Opportunity
    fund, days before the Metro Employee Benefit Board was
    to decide whether to unload its investment in
    it.

    "We have been notified, in a way that appears to not
    be official, but comes from sources within DC
    Partners, that they are dissolving their fund," Metro
    Finance Director David Manning said. "We have asked the
    lawyers to review this matter and advise the investment
    board on Tuesday as to how to best protect the
    interests of the Metro Benefit Board portfolio.

    "I
    have asked them to get a complete accounting of (the
    fund's) assets."

    An original $7.5 million stake in
    DC Investment Partners has lost some $800,000 --
    more than 10% -- in less than two years of booming
    financial markets. The benefit board committee that
    oversees a $1.6 billion pension fund had scheduled a
    meeting Tuesday originally to decide whether to get out
    of the investment because of the
    performance.

    "That confirms that I had a right to be concerned,"
    investment committee member Larry Ashworth said of the
    fund's potential dissolution.

    "My guess is the
    reason is that they are worried about the adverse press
    of our pulling out of it."

    The public stake
    in the DC Partners fund is a small part of the
    fast-growing Metro pension fund; Metro and DC Partners could
    not estimate Friday the city's eventual payout from
    it. But details of the investment open a window on
    benefit board practices as the agency undergoes the first
    audit in its 37-year history. The audit comes as Mayor
    Bill Purcell's administration questions past
    investment strategies.

    The pension fund's investment
    in DC Investment Partners came after investment
    committee members heard a presentation in May 1998 by
    principals Michael W. Devlin and Doctor Crants III. The
    presentation was bolstered by the presence on the DC fund's
    advisory board of names of prominent Nashville business
    figures, including former Columbia/HCA Healthcare Corp.
    executive Clayton McWhorter, board members
    said.

    Devlin and Crants left Prison Realty Trust late last
    year after a planned restructuring brought new
    leadership to the company, whose shares fell some 75% in
    1999.

    "Since that occurred, I had some concern about how the
    corporation was structured and how that applied to DC
    Partners," Ashworth said.

    Ken Renner, a spokesman for
    DC Investments Partners, said the termination of the
    fund had been coming for several months and had little
    to do with any relationship with Metro.

 
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