(Bloomberg) -- Billionaire Ken Fisher is starting to encounter a backlash after he made offensive remarks at a conference in San Francisco this week.
Clients of the $112 billion Fisher Investments, including large institutions, are in a position to reevaluate their relationship with Fisher after he shocked attendees Tuesday with lewd comments at the Tiburon CEO Summit.
“Fisher’s remarks are obviously concerning,” Shawna Lode, a spokeswoman for the Iowa Public Employees’ Retirement System, said by email. “Although our investment management contracts do not include a conduct policy, we hold our partners to the highest standards and reserve the right to amend or sever any contract at our discretion.” Fisher manages $386 million of the Iowa pension’s $34 billion.
Fisher Investments also manages 401(k) plans for dozens of companies, including Hames Corp., a family-owned grocery chain in Alaska.
“It certainly taints their reputation,” Maxwell Rule, chief financial officer of Hames, said in a phone interview. “I wouldn’t comment at this point whether this would lead us to take our business elsewhere, but I will certainly have a conversation with the ownership regarding that. As a fiduciary I have an obligation to have that conversation.”
In a letter to employees on Friday, Fisher Investments chief executive Damian Ornani said the firm plans to start a diversity and inclusion task force. In a separate letter to the staff, Fisher apologized and said he understood that his comments reflected poorly on him and the firm.
“Let me be clear: Ken’s comments were wrong,” Ornani said. “He has admitted that and apologized for them.”
Ornani defended the firm’s commitment to women and cited favorable statistics about females in leadership roles at the firm. The CEO said the firm has the same commitment to its female employees as it does its male employees. He said 30% of the firm’s managers are women and 23% of the vice presidents or above are females.
But he said the firm could do better and the new task force would examine all aspects of the state of diversity and inclusion at Fisher.
Fisher, 68, a longtime market commentator and conference speaker, has come under fire for comparing the process of gaining a client’s trust to “trying to get into a girl’s pants” and talking about genitalia at the financial services conference.
Audience members said they were appalled by the remarks. Tiburon Managing Partner Charles “Chip” Roame said in a statement Thursday that he was “extremely disappointed” and barred Fisher from future events.
Fisher initially said he was surprised that people found his remarks offensive. But two days after the conference, facing a barrage of criticism, he issued an apology.
“Some of the words and phrases I used during a recent conference to make certain points were clearly wrong and I shouldn’t have made them,” Fisher said in a statement Thursday. “I realize this kind of language has no place in our company or industry. I sincerely apologize.”
Fisher founded his Camas, Washington-based firm in 1979. His investors include more than 175 large institutions and 65,000 high-net-worth individuals, according to the firm’s website.
“Our relationship with Fisher Investments has always been very professional and highly geared toward providing a financial solution for our ownership team and our employees,” said Peter Hehemann, another 401(k) client of Fisher and CEO of He-Man Landscaping in Hawaii. “We will continue to monitor this as it continues to evolve.”
Representatives for more than 30 of Fisher’s 401(k) clients either declined to comment or didn’t return calls and emails. Many of the companies include small businesses such as doctor’s and dentist’s offices.
The firm participated in a job recruitment fair on Thursday at the University of Washington, about 180 miles from its headquarters. Students at the fair expressed consternation after hearing about Fisher’s comments.
“That’s just insane that someone who is so influential feels the entitlement in order to say things like that, especially in the kind of society we’re in today where people are trying to push for women being respected in the workplace,” said Nams Nayak, a senior political science major. “It’s just disappointing.”
Tinsley Hembree, who represented Fisher at the company’s booth, said it’s too soon to see an impact on recruiting. The firm has more than 1,700 employees, according to a May regulatory filing.
“Ken’s comments were taken out of context,” she said. “He is a colorful person and can say some outlandish things, but I personally have never been impacted by any type of harassment or ever felt degraded as a woman working in a finance firm, especially Fisher.”
The Hames CFO said Fisher’s comments were “absolutely unacceptable” and inconsistent with his company’s core values of diversity and respect.
“I’m monitoring the situation and seeing what develops and how he comes back and responds to the situation,” Rule said.
(Updates with client’s comment in 15th paragraph.)
--With assistance from Sabrina Willmer, Gwen Everett and Janet Lorin.
To contact the reporters on this story: John Gittelsohn in Los Angeles at email@example.com;Melissa Karsh in New York at firstname.lastname@example.org;Lily Katz in Seattle at email@example.com
To contact the editors responsible for this story: Alan Mirabella at firstname.lastname@example.org, Josh Friedman, Vincent Bielski
For more articles like this, please visit us at bloomberg.com
©2019 Bloomberg L.P.