Community groups ask New York State Comptroller to halt new investments with TPG, Blackstone over Puerto Rico foreclosures

Photo: Ruben Diaz Jr. (CC BY-ND 2.0)

Last week, community and Puerto Rican diaspora groups sent a letter to New York State Comptroller Thomas DiNapoli asking him to hold off on further investments with private equity firms TPG Capital and Blackstone Group until they halt foreclosures in Puerto Rico and provide a path for Puerto Ricans to stay in their homes.

DiNapoli is the sole trustee of the New York State Common Retirement Fund, a $192 billion pension fund that has invested more than $3.3 billion with Blackstone and more than $1.15 billion with TPG since 2012.

From the New York Daily News, Jan 17, “State Controller Thomas DiNapoli urged to stop investments in firms that hurt Puerto Rico’s economy”

Activist groups are asking state Controller Thomas DiNapoli to halt investments in two private equity firms they blame for worsening the foreclosure crisis in Puerto Rico.

In a letter to DiNapoli, the anti-hedge fund group Hedge Clippers and other organizations say the state Common Retirement Fund should make no new investments in the Blackstone Group and TPG Capital.

“We write to direct your urgent attention to the destructive role of these companies in the current crisis in Puerto Rico, in which massive hurricane damage and economic loss is being exploited by private equity funds seeking huge profits from human suffering,” says the letter, which was also signed by groups including New York Communities for Change and the Center for Popular Democracy.

“We ask that your office halt further investment with these firms until they provide a path for families to stay in their homes.”

The New York State Common Retirement Fund is an investor in Blackstone Tactical Opportunities Fund and Blackstone Tactical Opportunities Fund II, which own Finance of America, the Blackstone affiliate that has been foreclosing on homeowners in Puerto Rico.

DiNapoli’s fund may be considering a commitment to Blackstone’s successor fund Blackstone Tactical Opportunities Fund III, which is currently fundraising.  The NY Common Retirement Fund had not made a commitment to Blackstone Tactical Opportunities Fund III as of November 2017.

The New York State Common Retirement Fund is also an investor in TPG Capital funds TPG Opportunities Partners III, TSSP Adjacent Opportunities Partners 2.0, and TSSP Adjacent Opportunities Partners 3.0.  TSSP, which is TPG Capital’s credit and credit-related investment platform, is the unit of TPG that has been foreclosing on Puerto Rican homeowners and small business owners.

TPG/ TSSP will likely raise a new fund this year as its TPG Opportunities Partners III fund was more than 50% called as of March 2017.